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Medical Properties Trust (MPW): Evaluating Valuation After Dividend Hike and California Hospital Lease Progress

Simply Wall St · 3d ago

Medical Properties Trust (MPW) just raised its quarterly dividend by more than 12%, while signing a new lease for six California hospitals, a one two punch aimed at calming nerves around cash flow and tenant risk.

See our latest analysis for Medical Properties Trust.

Even with a choppy patch that saw a 7 day share price return of minus 9.26 percent, Medical Properties Trust still reports a year to date share price return of 24.38 percent and a 1 year total shareholder return of 36.19 percent. This suggests sentiment is cautiously improving after years of painful total shareholder losses.

If this kind of yield plus recovery story has your attention, it may be worth exploring other income focused names in healthcare real estate and services through healthcare stocks.

With shares still trading at a steep discount to some value estimates but sitting only a few percent below analyst targets, the key question now is whether MPW is a genuine bargain or whether the market is already pricing in a full recovery.

Most Popular Narrative: 2.8% Undervalued

With Medical Properties Trust last closing at $5.00 against a narrative fair value of $5.14, the valuation case hinges on a delicate earnings turnaround.

Analysts expect earnings to reach $136.7 million (and earnings per share of $0.25) by about September 2028, up from $-1.4 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $212 million in earnings, and the most bearish expecting $60.5 million.

Read the complete narrative.

Curious how a loss making REIT gets mapped to future double digit margins and a premium multiple usually reserved for market darlings? Discover the assumptions powering that leap.

Result: Fair Value of $5.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sizeable asset impairments and elevated refinancing costs still threaten earnings stability, leaving little room for error in the hospital turnaround story.

Find out about the key risks to this Medical Properties Trust narrative.

Build Your Own Medical Properties Trust Narrative

If you are skeptical of this view or prefer to dig into the numbers yourself, you can build a tailored narrative in just a few minutes, starting with Do it your way.

A great starting point for your Medical Properties Trust research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.