This Battered 8%-Yielding Dividend Gem Is Mounting a Comeback—Here’s Why

Wall Street left it for dead—now it's defying the skeptics.

Yield hunters, take note: A once-left-behind cash cow is shaking off the dust. After getting hammered by shortsighted institutional dumping (classic finance herd mentality), this 8%-payer is showing vital signs again.

The turnaround playbook:

- Operational streamlining cutting fat without touching muscle

- Debt restructuring that actually makes sense for once

- Revenue streams diversifying beyond 'hopium' projections

Why it matters now:

While crypto bros chase memecoins, real yield seekers are circling this rebound. The 8% dividend isn't some DeFi APY mirage—it's cold hard cash, backed by actual assets instead of vaporware whitepapers.

Just don't expect your financial advisor to recommend it—they're too busy collecting fees on underperforming index funds.

Image source: Getty Images.

New tenants are starting to contribute

Medical Properties Trust spent much of last year dealing with the bankruptcy of its former top tenant, Steward Health Care. The REIT was able to take back control of its real estate from Steward last September as part of the bankruptcy settlement. That allowed the hospital owner to transition the hospital operations to new tenants. It ultimately replaced Steward with five new tenants at 17 properties.

Those new tenants started paying rent this year under leases that steadily escalate rental rates over the next two years. The group collectively paid only $3.4 million in rent during the first quarter. That amount increased to $11 million in the second quarter as rental rates continued to escalate steadily. This represented 96% of the rent it billed to these tenants (it didn't collect $500,000 in rent from two facilities due to some start-up issues). Three of its tenants are already paying the fully ramped-up cash rate.

Rising rental income from these tenants, along with continued stability from most of its existing portfolio, enabled Medical Properties Trust to book a total of $240.4 million of revenue during the quarter. Meanwhile, the REIT reported $0.14 per share of normalized funds from operations (FFO) in the period. That easily supported its dividend payment of $0.08 per share.

The recovery should continue

Medical Properties Trust anticipates that rents from its new tenants will increase to $17 million in the third quarter. This number should continue rising. The REIT expects to reach the fully stabilized rate in October 2026, of around $160 million annualized (approximately $40 million per quarter). That drives its confidence that its annualized cash rent will exceed $1 billion by the end of next year.

"In summary, our transitional portfolio is quickly ramping performance and rent payments as expected, and our other tenants from around the world are delivering consistent performance, driven by healthy volume and cost trends," stated Rosa Hooper, senior VP of operations, on the second-quarter call. She continued, "Put simply, MPT's portfolio is well positioned to continue to generate significant cash FLOW and create value for shareholders moving forward."

More potential catalysts ahead

The company has several potential additional catalysts that could enhance its ability to grow shareholder value in the future. One is the final resolution with its other bankrupt tenant (Prospect Medical Holding). In March, the bankruptcy court approved a settlement between the REIT, Prospect, and other parties that will allow the bankrupt healthcare company to sell its hospital operations and the related real estate owned by Medical Properties Trust. As those sales occur, the REIT will receive funds that it can use to repay debt or invest in new income-generating assets.

Medical Properties Trust also continues to explore ways to grow earnings, reduce its cost of capital, and enhance its valuation. For example, it continues to own very valuable hospital real estate that it could monetize, potentially through joint venture transactions. Future moves could help unlock shareholder value by selling stakes in its properties at strong valuations and recycling the capital into new, higher-return investments. These moves could boost its share price and its ability to rebuild its dividend.

Healthy total return potential

Shares of Medical Properties Trust currently sit more than 80% below where they were in early 2022 before interest rates started rising, and its tenant issues began to worsen. That slump is why the company offers such a high dividend yield despite two DEEP cuts.

With its tenant and balance sheet issues now in the rearview mirror, the REIT's reset dividend is SAFE and could start rising in the future as its rental income increases. That growth, along with future moves to unlock shareholder value, could help drive a recovery in Medical Properties Trust's stock price. This combination of income and upside potential makes it a potentially very attractive investment opportunity these days.