Medical Properties Trust Inc (NYSE:MPW) shares are trading lower after the company announced plans to recover unpaid rent and outstanding debt obligations from Steward Health Care System.Thank you for reading this post, don't forget to subscribe!
Additionally, KeyBanc downgraded the stock from Overweight to Sector Weight, causing a 30% decline in the company’s stock price.
Why is this such a big deal?
The announcement regarding Steward Health Care System clearly shows that Medical Properties Trust is facing significant challenges in conducting its business.
Steward Health Care System, being a major tenant and borrower, plays a significant role in Medical Properties Trust’s revenue stream. Subsequently, difficulty collecting rent and debt obligations indicates potential financial instability.
Meanwhile, investors are in a holding pattern. The company’s ability to collect from Steward Health Care Systems will largely determine the direction of its stock price in the coming months.
A 30% decline in the stock price is a significant market reaction, reflecting the seriousness of the situation and the potential risks to the company’s future performance. Furthermore, this puts its 17.17% annual dividend yield at risk.
With all this said, Medical Properties Trust is a stock to wait and see rather than a buying opportunity on dips.
While you wait, consider other health care REITs like Community Health Services Trust Incorporated (NYSE:CHCT), CareTrust REIT, Inc. (NYSE:CTRE), and Welltower Inc. (NYSE:WELL).Investing in real estate is now very easy, and you can get started with as little as $100 in just minutes. Browse the available offerings here.
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This article Why Medical Properties Trust’s Stock Plunged 29% Today originally appeared on Benzinga.com
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