What Is the Dividend Payout for Medical Properties Trust?

Real estate investment trusts (REITs) tend to offer higher dividend yields. Medical Properties Trust (MPW -7.51%) is certainly no exception. The healthcare REIT currently has an eye-popping dividend yield of over 12%. That's nearly 10 times higher than the S&P 500's dividend yield (around 1.3%).

Here's a closer look at the healthcare REIT's monster yield and whether investors can bank on that big-time payout.

Diagnosing Medical Properties Trust's dividend

In late May, Medical Properties Trust declared its most recent quarterly dividend payment of $0.15 per share ($0.60 annually). With the REIT's stock price recently below $5 per share, it had a dividend yield of more than 12%. That's significantly above average, even for the higher-yielding REIT sector, where the average is over 4%.

The REIT's low share price is a big factor behind its ultra-high yield. Its stock price has tumbled nearly 80% from its peak in early 2022.

Two factors have weighed on its share price: Higher interest rates and tenant issues. Its two largest tenants have struggled financially since the pandemic's height, affecting their ability to pay rent. That issue and surging interest rates have hampered the REIT's ability to refinance maturing debt. As a result, it has had to take several actions to shore up its balance sheet, including selling properties and cutting its dividend by nearly 50% last year.

These actions are starting to pay off. Medical Properties Trust was recently able to refinance some debt at a much more attractive rate. It's working to take additional actions to improve its liquidity and portfolio, including selling or retenanting hospitals leased to its troubled tenants.

Is Medical Properties Trust a good REIT to buy for income?

Medical Properties Trust has improved its financial health significantly over the past year. However, it still has more work to do. Because of that, there's an elevated risk that the REIT could cut its dividend again. Given that possibility, it's not the best option for those seeking a bankable income stream right now.