2024-05-16 06:48:49 ET
Summary
- The current short interest on Medical Properties Trust stock sits around 38%, but you should not be on a short squeeze.
- Turnarounds do happen from time to time, but not nearly as often as many of us think.
- Our optimism for a successful turnaround is largely the result of survivor bias.
- In any case, for turnarounds to work, they always take time – which I don’t think MPW has much, judging by its liquidity and balance sheet.
MPW stock’s 10% dividend yield
I last wrote about Medical Properties Trust (MPW) about a year ago (in Jun of 2023 to be more precise, as seen in the screenshot below). At that point, the stock was featuring a quarterly dividend payout of $0.29 per share and a dividend yield of 12.6% on an FWD basis. More than its high dividend yield, what really got my attention was the short interest on MPW stock at that time. Quote:
The current short interest on Medical Properties stands above 20%. In my mind, such a high short interest is for good reasons. The current yield (12.6% on an FWD basis) is unlikely to be sustained. And the use of relatively high leverage further compounds the risks with interest rate uncertainties ahead. A comparison against Omega Healthcare underlines these risks and also illuminates the danger of chasing high yields in general.
Read the full article on Seeking Alpha
For further details see:
Medical Properties Trust: Dividend Trap Turned Into Value Trap