Is This 13%-Yielding Stock Due for a Dividend Cut?

Core Viewpoint - Medical Properties Trust (MPT) offers a high dividend yield of nearly 13%, but its financial performance raises concerns about the sustainability of this dividend [3][4][6]. Financial Performance - MPT has been selling off assets to improve cash flow, indicating insufficient cash generation for operations and dividend payments [3][4]. - The company reported a negative funds from operations (FFO) per share of $1.45 for the first half of the year, down from a positive $0.88 the previous year [6]. - Normalized FFO for the year so far is $0.47, significantly lower than $0.85 in the same period last year [6]. Recent Developments - MPT sold 11 healthcare facilities in Colorado for $86 million, which will be used to reduce debt and for general corporate purposes [4]. - The company executed $2.5 billion in liquidity transactions in 2024, highlighting the need for improved liquidity [4]. - One of MPT's key tenants, Steward Health, filed for bankruptcy protection, impacting MPT's share price and adding uncertainty [5]. Dividend Outlook - Although the current dividend payout of $0.30 per share suggests some sustainability, the ongoing asset sales and financial instability raise concerns about future dividend cuts [7][8]. - The overall sentiment is that MPT's dividend is not safe, and further deterioration in financials could lead to a reduction in dividends [8][9].