Medical Properties Trust REIT Loses More Than 50% Of Its Value In 9 Months


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A major real estate investment trust (REIT) has lost more than half its value since its early August 2022 highs. Medical Properties Trust Inc. MPW this week is making new 52-week lows as the months-long downward slide shows no sign of stopping.

The REIT is suffering, along with many others in the sector, from investors dumping shares as the banking crisis remains front-page news and the Federal Reserve keeps raising interest rates. Lower expectations for a pivot – where rates begin to go back down – are causing real estate assets to lose their appeal.

Medical Properties Trust, which invests in healthcare facilities, has a market capitalization of $4.5 billion and trades with a relatively low price-to-earnings (P/E) ratio of 4.83. In comparison, the P/E for the Standard & Poor’s 500 is 21.11 and the Shiller P/E ratio is 28.2.

Shares of the REIT can be purchased at 51% of book value. The past five-year funds from operations (FFO) shows growth of 12.8%. Over the most recent 12 months reported, the FFO increased by 35.8%. Medical Properties Trust has a bit more long-term debt than shareholder equity, a concern for value investors.

The shares are actively traded with an average daily volume of 16.36 million.

The company pays a 15.96% dividend — so high that it may be difficult to sustain under the current economic conditions.

The daily price chart looks like this:

The 200-day moving average (the red line) continues to trend downward as does the 50-day moving average (the blue line). Note that the price is deeply below both of them. The relative strength indicator (RSI) below the price chart is in its Oversold range, where it’s been for at least two weeks.

Here’s the weekly chart:

You can see where the 50-week moving average crosses below the 200-week moving average in November, generally a bearish indicator. That Medical Properties Trust trades below the low levels of the pandemic scare in March and April 2020 is remarkable because not many big New York Stock Exchange-listed REITs have declined so much.


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Not investment advice. For educational purposes only.

Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.





 

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