Medical Properties Trust Stock Rises Over 5% After $86 Million Asset Sale News

Medical Properties Trust (NYSE: MPW) has faced challenges this year, causing it to be an unpopular choice among investors. However, on Thursday, the real estate investment trust (REIT) saw its stock price rise by over 5% on the news of a significant divestment, outperforming the S&P 500, which increased by 1.6% on the same day.

A Notable Asset Sale

After the market closed on Wednesday, Medical Properties Trust announced the successful sale of 11 properties located in Colorado for $86 million. University of Colorado Health made the purchase, acquiring 11 freestanding healthcare facilities, including primary care and urgent care properties, that were developed by Medical Properties Trust between 2015 and 2017 for Adeptus Health. University of Colorado Health had begun leasing the facilities following Adeptus Health's Chapter 11 bankruptcy filing.

The sale is seen as a financial success for Medical Properties Trust, as the total initial cost of the 11 properties was $64 million, yielding a profit on the sale. The REIT plans to use the proceeds from the deal to retire debt and for general corporate purposes, although it did not provide specific details on the allocation.

Financial Recovery Efforts

The asset sale comes at a crucial time for Medical Properties Trust, as the company had recently faced difficulties, including the cutting of its dividend earlier this month. This decision, while not unexpected due to the challenges the company is facing, raised concerns among shareholders who primarily invested in the REIT for the dividend income. The sale of the Colorado assets is seen as a step towards recovering its financial stability, offering hope for improved finances in the near future.

Investment Consideration

Before making an investment decision, potential investors are advised to consider the insights from The Motley Fool Stock Advisor analyst team, which has identified the 10 best stocks  for investors to buy at the moment, and Medical Properties Trust did not make the list. While the company is taking steps to enhance its financial position, investors should assess its performance in the context of the broader market and the recommendations from reputable financial sources.

Overall, while Medical Properties Trust has faced challenges this year, the recent asset sale signifies a positive development for the rehabilitation of the company's financial performance. The move to divest 11 properties in Colorado demonstrates a strategic decision that has the potential to enhance the company's overall financial standing. As the company strives to recover from its recent setbacks and regain the trust of its investors, stakeholders will be closely monitoring its future endeavors and performance in the market.