Medical Properties Trust (MPW -2.29%) and NextEra Energy Partners (NEP -3.68%) have gotten crushed this year. They've both lost more than two-thirds of their value. That sell-off has driven their dividend yields into the double digits, suggesting that investors expect another shoe to drop.

Both companies are very risky bets right now. However, they have tremendous upside potential. Their dividends alone could supply shareholders with double-digit total returns if they maintain those payouts. Here's a look at their risk-reward profiles.

Working to get healthy again

Medical Properties Trust stock has cratered nearly 67% over the past year. That has pushed the yield on its reset dividend up to more than 13%. Several factors have weighed on the healthcare real estate investment trust (REIT), including tenant issues and higher interest rates.

The hospital owner has been working hard to address both issues. It has provided additional financial support to some of its struggling tenants. The REIT also sold assets and slashed its dividend by about 50% to give it the cash to repay debt as it matures. Given the current market conditions and its financial situation, it can't refinance those borrowings at an attractive rate.

Medical Properties Trust now has the liquidity it needs to address its debt maturities through next year. It plans to sell additional assets over the coming months to further improve its financial position and get a head start on its 2025 maturities. It believes that these asset sales will further confirm the value of its hospital real estate while taking the pressure off its balance sheet.

The REIT owned $19 billion of hospital properties at the end of the third quarter. However, it currently only has a $12.5 billion enterprise value due to the steep sell-off in its shares. That implies it trades at a roughly 35% discount to the value of its assets, giving it more than 50% upside potential. If it can successfully navigate its challenges, including monetizing assets at strong valuations, strengthening its balance sheet, and maintaining its reset dividend rate, it could reward investors richly from here.

Shifting to low-power mode

NextEra Energy Partners has lost 70% of its value over the past year. That steep slump has pushed its dividend yield up to more than 14.5%. This rate suggests investors don't believe the renewable energy producer's payout is sustainable.

Higher interest rates have been the main factor weighing on NextEra Energy Partners, which has increased its borrowing costs. Add in its slumping share price, and its cost of capital has skyrocketed. That's making it harder for the company to pay off the convertible equity portfolio financing (CEPFs) it used to fund its growth. It also made it too expensive to get new funding for its continued expansion.

Those issues forced NextEra Energy Partners to slam on the brakes. The company cut its dividend growth rate forecast from 12% to 15% annually through 2026 to 5% to 8% per year with a target of 6%. It also shifted its expansion strategy from acquiring income-producing renewable energy assets to investing in high-return wind repowering projects that replace existing turbines with larger ones that produce more power (and cash flow). Meanwhile, it's selling its gas pipeline assets to fund the redemption of its CEPFs and bolster its balance sheet.

NextEra Energy Partners recently agreed to sell its Texas gas pipeline portfolio to Kinder Morgan in a $1.8 billion deal. That will give it the cash to address the majority of its CEFPs through 2026. Meanwhile, it plans to sell its other gas pipeline business in 2025 to address the remaining CEFP and give it cash to fund acquisitions.

The company expects to grow its dividend by around a 6% annual rate through 2026 while maintaining a payout ratio in the mid-90% range. That's really high, which is why the market doesn't believe it can achieve its plan. Instead of growing its payout, the market has priced in a meaningful dividend cut. A dividend reduction might not be a bad idea, since it would free up that cash to further strengthen its balance sheet and fund new investments.

However, if NextEra Energy Partners can successfully execute its plan to continue expanding its cash-flowing renewable energy assets portfolio while improving its balance sheet, it could produce powerful total returns in the coming years.

Not for the faint of heart

Medical Properties Trust and NextEra Energy Partners are battling significant headwinds right now. However, they have developed plans that should allow them to navigate these difficult times. They could produce big-time total returns in the coming years if they're successful. However, there's a real risk that they might not be able to achieve their plans. Because of that, investors need to keep risk in mind before they take a chance on these potential high-reward investment opportunities.