Shares of Medical Properties Trust (MPW 0.65%) were skyrocketing 25.1% this week as of the market close on Thursday, according to data provided by S&P Global Market Intelligence. The big jump was due to two positive announcements from the company last week.
On Friday, April 12, Medical Properties Trust reported the sale of its interests in five Utah hospitals to a joint venture (JV) with an investment fund for around $1.1 billion. Medical Properties Trust owns roughly 25% of the JV. The same day, the healthcare real estate investment trust (REIT) declared its quarterly dividend of $0.15 per share -- unchanged from the previous quarter.
Why investors liked Medical Properties Trust's news so much
Much of Medical Properties Trust's value proposition to investors stems from its ultra-high-yield dividend. Some investors were likely worried that the REIT would cut its dividend payout for the second time in nine months. That didn't happen, allowing shareholders to breathe a big sigh of relief.
Even better, the sale of the Utah hospitals further fortifies Medical Properties Trust's balance sheet. This deal came on top of another sale announced on April 9 of five facilities in California and New Jersey to Prime Healthcare for a total of $350 million. These transactions improve the likelihood that Medical Properties Trust can continue to pay its dividend at current levels.
Is Medical Properties Trust stock a buy now?
Medical Properties Trust's latest updates arguably give investors a reason to be cautiously optimistic about the company. The stock could continue to be highly volatile, though. Medical Properties Trust isn't out of the woods just yet. Most investors will be better off avoiding the stock for now. However, the healthcare REIT's dividend yield of nearly 12.2% combined with the potential for a sustained rebound could be tempting to aggressive investors.
