Medical Properties Trust Q2 Earnings Analysis: Dividend Cut Incoming? MPW Stock

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Medical Properties Trust (NYSE: MPW) has recently released its Q2 report, and the market really didn’t like it. From the day of the release, MPW is down by over 20% and is now back to the lows from March and May this year.

Here's my analysis of Medical Properties Trust's (NYSE: MPW) latest earnings report. I talk about the potential dividend cut, the improvement in numbers and I also include the recent news about Prospect Medical Holdings (this came out less than an hour ago so I couldn't record audio about it, but I added my thoughts in the video).

Now, getting into the numbers, we can see a nice increase in AFFO to over $240 million, but we have to take into account that roughly $68 million of this is in equity in a company instead of cash. If this continues, it can be an issue because the liquid value of that stake can be even zero when they need it. In fact, they expect that to be the case, and this is the main reason for the crash.

I think this can be summarized very well in this one question and answer right from before the Q&A ended. Without the equity, the company is getting around 28 cents in AFFO per quarter. The dividend is 29 cents.

Add other potential issues or things that would require them to spend money and you can see the gap between the money they receive and the money they have to pay as dividends becoming wider. This is pretty much the main reason behind the crash.

And probably the nail in the coffin for the crash: the CFO said that everything is on the table. This pretty much means either cutting the dividend, selling some assets or getting some debt. It doesn’t necessarily mean a dividend cut, but it is an option and it was enough to make the stock crash.

If you ask me, cutting the dividend would be the best option for the company. The impact on the stock is probably not even going to be that high since it already crashed on the possibility.

They anticipate a more than more than $50 million increase in cash rent next year, but the timing of that and the debt and the dividend can be a bit tricky. So, I wouldn’t really rely on this money.

I don’t think it would be bad if they decide to cut the dividend for a few years so that they can focus on paying down debt. The next couple years actually carry the most debt for the company, and I would rather see them cut the dividend as much as they are allowed to, instead of getting expensive debt or selling assets. More on this in a second, I just wanna finish the report.

Other videos:
Medical Properties Trust (MPW) Stock Analysis - https://youtu.be/FeCPz4qqFec
Stellantis (STLA) Stock Analysis - https://youtu.be/of2uv0npYsc
Freeport-McMoRan (FCX) Stock Analysis - https://youtu.be/91ggPBaGFLQ
Nokia (NOK) Stock Analysis - https://youtu.be/LksBa929CI4
Omega Healthcare Investors (OHI) Stock Analysis - https://youtu.be/6bvoCQk3xig
Rio Tinto Stock Analysis (RIO) - https://youtu.be/GBilshVQ4K8
Barrick Gold Stock Analysis (GOLD) - https://youtu.be/ghCZw1iBXvM

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On my channel, you will find a wide variety of stock analyses - from gold miners such as Barrick Gold (NYSE: GOLD) and Newmont Mining (NYSE: NEM) to tech stocks like Nokia (NYSE:NOK), Alphabet (NYSE: GOOG/GOOGL), Intel (NYSE: INTC) and even healthcare REITs like Medical Properties Trust (NYSE: MPW) and Omega Healthcare Investors (NYSE: OHI).

Although I mostly focus on value investing, there will also be plenty of high-yield dividend stocks being analysed on the channel, especially if I believe that there is value in there.

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0:00 Medical Properties Trust (MPW) Earnings Analysis

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