If You Invested $10,000 in Medical Properties Trust in 2014, This Is How Much You Would Have Today
A decade of struggles for Medical Properties Trust leaves investors questioning the future of the healthcare REIT.
Investing in the stock market can be a lucrative endeavor, but not all stocks guarantee a positive return on investment. Medical Properties Trust (NYSE: MPW), a real estate investment trust (REIT) focused on hospitals, has experienced a tumultuous journey in recent years. With rising interest rates and the impact of the COVID-19 pandemic, the stock has faced significant challenges, leaving investors wondering about the potential returns on their investments. Let’s explore where the stock stood a decade ago and what the current outlook is for Medical Properties Trust.
Where the stock was trading in January 2014:
In January 2014, Medical Properties Trust (MPT) closed at $12.30 per share. If an investor had allocated $10,000 to the healthcare stock at that time, they would have acquired approximately 813 shares of the REIT. By the end of 2021, the stock had climbed to around $23, offering a glimmer of hope for investors. However, the subsequent years proved to be challenging for Medical Properties Trust, resulting in a sharp decline in its value since 2022.
The current state of Medical Properties Trust:
As of now, MPT stock trades at around $3.30 per share, significantly lower than its previous highs. If an investor had held onto their 813 shares, they would now be worth less than $2,700. However, it’s important to consider the impact of dividends on the investment. Factoring in the dividend payouts, the total investment would be worth approximately $5,100. Despite this, the total return over the past 10 years remains negative, with a decline of 49% (or 73% when excluding the dividend payout).
The future outlook for Medical Properties Trust:
Unfortunately for MPT investors, the REIT is still grappling with the effects of elevated interest rates and rent collection issues. The company is currently working with one of its key tenants, Steward Health, to improve its financials. However, there are doubts about whether interest rates will decrease this year, making it challenging for the stock to recover. The company’s funds from operations per share show promise, but until the rent collection issues are resolved and tenant stability is assured, winning over investors will be an uphill battle. Even the stock’s high yield of 18% may not be enough to entice investors at this point.
Investing in Medical Properties Trust:
Investors should exercise caution when considering investing in Medical Properties Trust. While there is a possibility of a turnaround in the future, it may take years to materialize. Additionally, without the prospect of lower interest rates, investors may remain hesitant to invest in REITs. Unless one has a high risk tolerance and is willing to be patient with the stock, it may be advisable to avoid it entirely.
Conclusion:
Medical Properties Trust has faced significant challenges over the past decade, resulting in a negative return on investment for many shareholders. The combination of rising interest rates and the fallout from the COVID-19 pandemic has impacted the stock’s value and raised concerns about its future prospects. While there is still a possibility for the REIT to recover, it will require time, stability in the healthcare sector, and potentially lower interest rates. Investors should carefully evaluate their risk tolerance and consider alternative investment options before committing to Medical Properties Trust.