Medical Properties Trust (MPW -4.07%) is a real estate investment trust (REIT) with over 400 properties in its portfolio, mainly hospitals. It is also geographically diverse, with investments in Europe and South America. Despite the broad healthcare reach, the REIT hasn't made for a good investment in recent years.

Let's look at how the stock has performed since 2018 and whether its high dividend has been enough to offset losses for investors.

Where the stock was trading in 2018

On Aug. 31, 2018, Medical Properties stock closed at $15.05. Investing $10,000 at the time would have netted you 664 shares. At Monday's closing price of $7.01, that investment would now be worth less than $4,700. Overall, that's a decline of 53%.

If you include the REIT's dividend in the calculation, however, then that helps to soften the blow. Medical Properties' total returns during that same time frame would be a negative 35%, with the investment's value closer to $6,500 including the dividend. It's still not great, but the payout helped lessen the damages.

While the top line has risen in recent years, the underwhelming bottom line for this company is what has likely kept investors away. 

MPW Revenue (Annual) Chart

MPW revenue (annual) data by YCharts.

Why the free fall could continue

This week, Medical Properties Trust announced it would be slashing its dividend. The new payment will be $0.15 per share per quarter, which is nearly half the $0.29 that the REIT was previously paying. It's a steep haircut that the company explains by saying, "This refreshed strategy prioritizes actions to expedite debt reduction while continuing to return substantial cash to shareholders."

The stock's yield was previously well over 10%, and there were warning signs that a dividend cut was coming: The company's bottom line has been declining, and one of its largest tenants, Prospect Medical, struggled to pay rent.

A dividend cut appeared inevitable as the REIT's financials simply need to be stronger with interest rates remaining high and more than $10.2 billion in debt on its books at the end of June, which is largely unchanged from the start of the year.

The news of a dividend cut sent the stock lower, and the sell-off could continue as a high yield might have been one of the few things to attract investors to the stock. Medical Properties' struggles don't make it an alluring option for growth investors. REITs in general are normally investments that are most suitable for income investors.

Should you buy the stock today?

Now that the long-awaited bad news and dividend cut have arrived, an argument could be made that perhaps the worst is over. A significantly reduced dividend becomes much more sustainable. At $0.15 per share, Medical Properties stock is still yielding close to 9%, which remains fairly high and tells you just how obscenely high the yield was before the dividend cut.

But investors shouldn't fall into the same trap again. The focus should be on the business, not the dividend. And until the company's financials improve and it can reduce the overall risk from its debt and its tenants, investors should avoid the stock.

Medical Properties needs to post stronger results with some consistency before investors rely on its dividend and take a chance on it as an investment. The risk is reduced, but it isn't gone.