Shares of Medical Properties Trust (NYSE: MPW) soared 18.6% on Wednesday after the largest tenant of the healthcare facilities-focused real estate investment trust (REIT) announced a deal to sell its doctor network to UnitedHealth (NYSE: UNH) subsidiary Optum.
Medical Properties’ largest tenant may finally be able to pay its bills
In a story first reported by the Boston Globe late yesterday, beleaguered hospital operator Steward Health Care has struck a deal to divest its nationwide physician network to UnitedHealth’s Optum segment. The exact terms of the deal weren’t disclosed. But considering Steward Health Care hasn’t been paying its rent to Medical Properties Trust as it has grappled with financial hardship in recent quarters — and coupled with the fact Steward previously represented as much as 20% of Medical Properties Trust’s total revenue — Medical Properties Trust shares are understandably rallying given the prospect that Steward could catch up on its past-due obligations.
Medical Properties Trust previously reduced its dividend in August by nearly 50% to $0.15 per share due to Steward Health Care’s inability to pay its rent. In a January update, Medical Properties Trust revealed Steward owed a total of $50 million in unpaid rent to the REIT at the end of 2023.
What’s next for Medical Properties Trust investors?
Steward Health Care’s agreement isn’t a done deal just yet; the deal is widely expected to receive pushback from antitrust regulators who worry that Optum’s recent acquisitive streak could threaten competition across the country.
But if this deal passes regulatory muster, it could represent a massive boon for Medical Properties Trust investors who’ve watched helplessly as their company’s single largest tenant missed its significant rent payments.
Should you invest $1,000 in Medical Properties Trust right now?
Before you buy stock in Medical Properties Trust, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medical Properties Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 25, 2024
Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
Why Medical Properties Trust Stock Popped Today was originally published by The Motley Fool
