![]() ![]() ![]() These two tenants account for some 30% of MPW's revenues, which so far is not at risk, but MPW may have some issues in the future to collect rent from these tenants. Moreover, more recently, there was more news that two of its largest tenants, namely Steward Health Care and Prospect Medical Holdings, are seeking to refinance their debts as they cannot tap public markets in the current environment, showing that their financial situation is not particularly strong. It will also increase even further its tenant concentration, even though the impact is not that worrisome, but given that tenant concentration was one of MPW's key weaknesses, the need to sell assets to manage its debt load is a negative step for MPW's business profile. Therefore, MPW's FFO and cash flow will be negatively impacted by this deal, putting further pressure on its dividend sustainability from 2024 onwards. On the other hand, the sale of these assets will be done at a small discount to book value and will lose about $54 million of annual rental income, while saving only about $20 million on annual interest expenses. Proceeds from this deal will be used to repay MPW's AUD term loan, which was reflected in MPW's books at $818 million, thus MPW will ease its refinancing needs for 2024, which can be considered to be a positive move. MPW will sell 11 hospitals in the country for some $800 million, which were purchased by MPW back in 2019 for $840 million, in a competitive process that began in October 2022 and is expected to close during the second half of 2023. Since my last article, MPW was able to reach a deal to sell some assets in Australia, which will also enable the company to repay a loan tied to these assets. In this article, I analyze the company's most recent developments and also take a look in more detail into its debt load, to see if its relatively high financial leverage is also a concern regarding MPW's dividend sustainability or not. This lower share price has led to a dividend yield of close to 15%, which may appear attractive to income investors, but as I've analyzed previously its dividend is not covered by cash flows and therefore not sustainable over the long term. Since my first article on MPW back in March, its total return is negative by close to 20%, being a huge underperformer compared to the overall stock market. Medical Properties Trust ( NYSE: MPW) does not enough liquidity to cover upcoming maturities over the next couple of years and a dividend cut seems to be just a matter of time, making it a poor income investment.Īs I've analyzed in previous articles, I'm bearish on Medical Properties Trust over the long term as the business has some issues and controversies, plus its high-dividend yield is not sustainable and, in my opinion, a dividend cut is likely in the near future. ![]()
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