No Surprise: This Ultra-High-Yielding Dividend Stock Cuts Its Payout Again

Core Viewpoint - Medical Properties Trust is facing significant challenges due to the bankruptcy of its top tenant, Steward Health Care, leading to a reduction in cash dividends and a need to amend its credit facility [1][2][12]. Financial Performance and Dividend Changes - The REIT has cut its dividend again, limiting it to no more than $0.08 per share, which is approximately 47% lower than the current level of $0.15 per share, effective through the end of next September [6][12]. - This reduction is aimed at retaining more cash while transitioning hospital operations to other operators [7][12]. Liquidity and Debt Management - Medical Properties Trust has successfully raised over $2.5 billion this year through asset sales and financing agreements, allowing it to repay $1.5 billion of debt, including all 2024 maturities [4]. - The REIT's credit facility capacity has been amended to fall from $1.4 billion to less than $1.3 billion due to the financial pressures from its tenants [5][6]. Tenant Issues and Operational Challenges - Steward Health Care's bankruptcy has created difficulties in finding new operators for its hospitals, impacting the REIT's operations and financial stability [5][12]. - A recent auction of five hospitals yielded acceptable bids for only two facilities at low prices, with the potential closure of three others [9]. - Regulatory restrictions have complicated the transfer of ownership for eight hospitals in Massachusetts, leading to a loss of 50% ownership to the lender [10]. Rent Payments and Financial Obligations - Despite the challenges, Steward paid $19 million in rent in May and June and was current on obligations related to Massachusetts properties, also making all scheduled payments in July [11]. - Prospect Medical Holdings, another financially troubled tenant, satisfied all past due amounts and made payments totaling $22 million in the first and second quarters [11].