Is Medical Properties Trust (MPW -1.10%) still a top dividend stock?

On the one hand, the hospital-focused REIT slashed its payouts earlier this year, something income-seekers loathe. However, others will argue that it was a necessary move to stabilize its financial situation.

Medical Properties Trust can now go on to rebuild a solid dividend track record, given its status as a real estate investment trust (REIT) (required to issue 90% of their taxable income as dividends), as well as its stronger financial situation and still incredibly high yield of 17.19% as of this writing.

My view is that it'd be best to opt for a dividend company that hasn't cut its payouts lately. One that currently looks attractive is CVS Health (CVS -0.22%). Let's consider why.

The market is undervaluing CVS

CVS Health isn't keeping pace with the broader market this year, as it has encountered issues that have affected its revenue and earnings. On the top line, CVS Health is being harmed by a decrease in COVID-19 vaccination rates. And on the bottom line, the healthcare giant has had to revise its full-year earnings-per-share guidance, partly due to expenses related to recent acquisitions.

Still, CVS Health's shares are down by a massive 21% this year, which seems a bit much. On the positive side, the company looks reasonably valued. CVS Health is trading at a forward price-to-earnings ratio of just 8.5. For context, the average forward P/E for the healthcare industry currently tops 16.9 -- so CVS Health looks dirt cheap in comparison, at least by this popular metric.

A solid dividend profile

CVS Health's dividend yield of 3.75% isn't quite as eye-popping as Medical Properties Trust's 17.19% -- but it is still meaningfully higher than the S&P 500's 1.62%. At any rate, a yield is just one of the metrics income-seeking investors should look at, and it arguably isn't even the most important one.

Consider, for instance, that CVS Health has raised its dividends by 141.8% in the past 10 years, which is pretty impressive. Further, the company's cash payout ratio is 27.18%, whereas anything under 60% is generally considered "good."

The takeaway is that CVS Health has plenty of room to boost its dividends, as it has in the past decade, meaning investors are unlikely to see their payouts slashed with this healthcare leader, unlike what recently happened with Medical Properties Trust.

Buy while shares are down

While its dividend program and associated metrics look strong, it is CVS Health's underlying business that should matter most to investors. In that department, the company also looks solid despite the headwinds it has encountered in 2023.

First, CVS Health remains one of the leading pharmacy chains in the U.S. That is a difficult market to penetrate. Besides the capital-intensive nature of building a network of thousands of facilities across the U.S., any newcomer would also have to deal with building trust with patients and forming relationships with hospital systems and insurers. Already-established companies have a distinct advantage, and CVS Health is one of them.

Second, CVS Health is looking to become a vertically integrated healthcare company. It is now in the insurance and primary care businesses. CVS Health also recently decided to form a subsidiary dedicated to developing biosimilar drugs (biological drugs that are very similar to a drug that is already approved, otherwise known as a "reference medicine"). CVS Health's ecosystem should strengthen over time, especially as demand for medical care increases along with the percentage of the population aged 65 and older.

That's why the company's long-term prospects look attractive. It's hard to say the same about Medical Properties Trust, a company still facing financial problems -- just as it has in recent years -- and a somewhat shaky outlook.

Of these two dividend stocks, it is clear which one is the winner: CVS Health. That's especially the case at current levels. Income seekers can safely load up on shares of the healthcare giant before they rebound.