The Buy Thesis
Our buy thesis for Medical Properties Trust (NYSE:MPW) is quite simple in that the company is far too high-quality to be trading at such a cheap price. It will take the following form.
MPW is the leader of the industry with substantial and sustainable competitive advantage. The present valuation does not account for its superior quality. Therefore, MPW is a strong buy at the current pricing.
As the dominant player with a superior growth trajectory, it should trade at a slight premium to the sector with a multiple of 15X, which equates to a market price of $19.50. This implies 32% upside in holding MPW, in addition to a dividend yield over 6%.
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