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Medical Properties Trust Co., Ltd. (NYSE:MPW) stock is falling after the company announced plans to collect uncollected rent and outstanding loan debt from Steward Health Care System.
KeyBank also downgraded the stock from overweight to sector weight, which also contributed to the 30% drop in the company’s stock price.
Why is this a big deal?
The Steward Health Care System announcement clearly demonstrates that Medical Properties Trust faces significant operational challenges.
Steward Health Care System is a major tenant and lessee and plays a significant role in Medical Properties Trust’s revenue stream. This indicates that you may then find it difficult to collect your rent or loan, leading to financial instability.
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So?
Meanwhile, investors are in a holding pattern. The company’s ability to recover from Steward Healthcare System will largely determine the direction of its stock price in the coming months.
The 30% decline in the stock price was a significant market reaction, reflecting the seriousness of the situation and the potential risks to the company’s future performance. Additionally, the annual dividend yield of 17.17% is at risk.
All of this makes Medical Property Trust a wait-and-see stock rather than a buy-on-the-moment opportunity.
While you wait, consider these other healthcare REITs: Community Healthcare Trust Co., Ltd. (NYSE:CHCT), Caretra Street Investment Corporation (NYSE:CTRE), and Well Tower Co., Ltd. (NYSE:WELL) Investing in real estate just got a whole lot easier, and you can get started in minutes with just $100. See available products here.
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