Medical Properties Trust (MPW) is a property REIT that specializes in owning leading medical facilities and hospitals to healthcare providers, observes Rida Morwa, income expert and founding partner of High Dividend Opportunities.
Medical Properties Trust had an awful 2022, being the focus of short reports and heavily shorted, and you wouldn't be wrong to feel like investors thought there was an outbreak in healthy living. Sadly this was not the case. The REIT has continued to own and lease a large number of hospitals which provide essential services to their communities.
So why is MPW a Top Pick for 2023? We expect that the shares will climb meaningfully through 2023. Medical Properties has fallen 46% in 2022 meaning to recover to prior levels, it would need to climb over 90%. That's a ton of upside potential.
So why do we think it has the ability to do so in 2023? MPW's earnings and price action have become completely dislocated from each other. Its funds from operations per share has risen in 2022, and is at the highest levels its ever been — not a sign of a failing REIT at all.
Its no secret that hospitals struggled financially in 2020 and 2021, with elective surgeries canceled, the massive impact of COVID-19 on operation profits, and labor shortages. The government stepped in and pre-paid many expenses for hospitals which were required to be paid back in 2022. This placed a significant strain on many hospital operators, causing some to slide into bankruptcy.
MPW's rent payments have not stopped, and their largest revenue source — Steward — has successfully repaid the government and isn't at a risk of bankruptcy any longer. Its revenue has a clear pathway to continue to grow, as does its dividend. MPW has raised its dividend 9 years in a row and shows no sign of stopping.
So in 2023, you should be holding Medical Properties Trust for its massive recovery potential and income generation. 2022 was a dismal year for MPW, setting up 2023 to be an epic comeback story.
