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Medical Properties Stock Gains 17.5% YTD: Will the Trend Last?
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Shares of Medical Properties Trust (MPW - Free Report) — also known as MPT — have gained 17.5% in the year-to-date period, outperforming the industry’s growth of 2%.
This healthcare real estate investment trust (REIT) is engaged in acquiring and developing net-leased healthcare facilities. Its properties consist of general acute care hospitals, behavioral health facilities, post-acute care facilities, freestanding ER/urgent care facilities and other assets.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price.
The senior citizens’ population is expected to rise in the years ahead. As a result, the national healthcare expenditure by senior citizens, who constitute a major customer base of healthcare services and incur higher healthcare expenditures than the average population, will likely increase in the upcoming period.
Moreover, the healthcare sector is relatively immune to the macroeconomic problems faced by office, retail and apartment companies and offers stability to the company amid volatility in the market. This is because even amid tough economic conditions, consumers need to spend on healthcare services while curtailing discretionary purchases.
Medical Properties, carrying a Zacks Rank #3 (Hold) at present, leases facilities to healthcare operating companies. These facilities generally have initial fixed lease terms of at least 15 years, with most including five-year renewal options. More than 99% of its leases provide annual rent escalations based on increases in the Consumer Price.
Strategic sell-outs provide the company with the dry powder to reinvest in opportunistic developments and redevelopments. In the first quarter of 2025, MPT sold two facilities and an ancillary facility for approximately $20 million, resulting in a gain on real estate of $8.1 million. These two facilities were held for sale as of Dec. 31, 2024, along with a third facility that is expected to be sold during the second quarter of 2025.
Medical Properties has been making efforts to enhance its liquidity position and financial strength. As of May 7, 2025, the company had approximately $1.3 billion of liquidity. After the February 2025 refinancing transactions, the company has no debt maturities coming due in the next twelve months. Its access to diverse capital sources through capital recycling and internal cash flow provides ample financial flexibility and is likely to support its growth endeavors.
Key Risks for MPW
Operator concentration risk, potential tenant bankruptcies and substantial debt burden remain concerns for Medical Properties. Any further reduction in dividend payouts will likely decrease shareholder value.
The Zacks Consensus Estimate for CTRE’s 2025 FFO per share is pinned at $1.81, which suggests year-over-year growth of 20.7%.
The Zacks Consensus Estimate for UNIT’s 2025 FFO per share stands at $1.50, which indicates an increase of 11.1% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Medical Properties Stock Gains 17.5% YTD: Will the Trend Last?
Shares of Medical Properties Trust (MPW - Free Report) — also known as MPT — have gained 17.5% in the year-to-date period, outperforming the industry’s growth of 2%.
This healthcare real estate investment trust (REIT) is engaged in acquiring and developing net-leased healthcare facilities. Its properties consist of general acute care hospitals, behavioral health facilities, post-acute care facilities, freestanding ER/urgent care facilities and other assets.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price.
The senior citizens’ population is expected to rise in the years ahead. As a result, the national healthcare expenditure by senior citizens, who constitute a major customer base of healthcare services and incur higher healthcare expenditures than the average population, will likely increase in the upcoming period.
Moreover, the healthcare sector is relatively immune to the macroeconomic problems faced by office, retail and apartment companies and offers stability to the company amid volatility in the market. This is because even amid tough economic conditions, consumers need to spend on healthcare services while curtailing discretionary purchases.
Medical Properties, carrying a Zacks Rank #3 (Hold) at present, leases facilities to healthcare operating companies. These facilities generally have initial fixed lease terms of at least 15 years, with most including five-year renewal options. More than 99% of its leases provide annual rent escalations based on increases in the Consumer Price.
Strategic sell-outs provide the company with the dry powder to reinvest in opportunistic developments and redevelopments. In the first quarter of 2025, MPT sold two facilities and an ancillary facility for approximately $20 million, resulting in a gain on real estate of $8.1 million. These two facilities were held for sale as of Dec. 31, 2024, along with a third facility that is expected to be sold during the second quarter of 2025.
Medical Properties has been making efforts to enhance its liquidity position and financial strength. As of May 7, 2025, the company had approximately $1.3 billion of liquidity. After the February 2025 refinancing transactions, the company has no debt maturities coming due in the next twelve months. Its access to diverse capital sources through capital recycling and internal cash flow provides ample financial flexibility and is likely to support its growth endeavors.
Key Risks for MPW
Operator concentration risk, potential tenant bankruptcies and substantial debt burden remain concerns for Medical Properties. Any further reduction in dividend payouts will likely decrease shareholder value.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are CareTrust REIT (CTRE - Free Report) and Uniti Group (UNIT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CTRE’s 2025 FFO per share is pinned at $1.81, which suggests year-over-year growth of 20.7%.
The Zacks Consensus Estimate for UNIT’s 2025 FFO per share stands at $1.50, which indicates an increase of 11.1% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.