Medical Properties FFO of $0.46 beats by $0.01, revenue of $400.22M misses by $0.68M

• Medical Properties press release (NYSE:MPW): Q2 FFO of $0.46 beats by $0.01.
• Revenue of $400.22M (+4.8% Y/Y) misses by $0.68M.
• The Company is maintaining its estimates of per share net income of $1.88 to $1.92 including gains on sales of $0.78 per share and NFFO of $1.78 to $1.82 vs. $1.82 consensus.

Comments

[Lt. Columbo]

whats irks me here is the market is up 400 points and this is down 5%, I kept buying on the way down and im down 24% on 3000 shares. Today down 2,500 just sucks, I do not think that 15 is out of the question here. This is down 30 percent YTD I don't think people realize.

[wal shoe]

Boring MPW, glad that I sold half of my position a few month ago, holding now with much better yield on cost.

[Gregg Rosenberg]

What catches my attention isn't the beat/miss. It's that revenue and AFFO are substantially lagging inflation. A triple net with strong tenants should be raising rents aggressively and experiencing leveraged growth in cash flows. It seems like MPW's tenants aren't strong enough to shoulder rent increases in line with the economy.

[Stefan Redlich]

@Gregg Rosenberg yeah so what? who is really strong enough to shoulder these rent increases of almost 10%?!

[John Windelborn]

@Gregg Rosenberg you must be new to triple net leases if you don't understand that they are long term contracts with only modest annual escalators. This isn't an apartment REIT.

[arnold.bird]

@Gregg Rosenberg The leases are long-term. You only get to raise rent on lease renewal, or according to contractual escalators.

[arnold.bird]

Things trending very nicely. Steward expected to show “substantial and sustainable” positive cash flow by Q4.

[Stefan Redlich]

Strange that it drops 5% but whatever

[Katelyn Cate]

@Stefan Redlich I'm not opposed to buying more MPW under $16...

[nealyohara]

@Katelyn Cate My bid is in.

[Fb12]

@Stefan Redlich Really? It went back to even after the very positive CC, then the shorts drove it down again with no actual news. Once we get the Seward update expect a big short squeeze.

[Fb12]

Basically in line earnings. No reason to buy so the shorts will try to push it down. If it overshoots, to say 15.5, I will buy more.

[De peste Drum]

@Fb12 I am happy with 16 as well. It is however curious that they have delivered in line with expectations, minus a minor deviation and the market is reacting as if they had no revenue at all.

[N93143]

@De peste Drum The headline is ridiculous and encapsulates what's wrong with Wall St and the investor/analyst community. Not only do they fixate on Quarterly results, but also on the deviations from the Guesses from a bunch of people with little direct knowledge of what is going on in a corporation. The analysts could have bumped their numbers one way or the other with little trouble. And then what would the headline read???

"Beats"? Misses? By a hair. Looks like the guessers were dead-nuts on. If SA makes the headlines, they are pert of the circus. It should read "in line with".... National Inquirer supermarket check-out line is next for those guys.

[hafen]

Not a terrible report IMHO, but the price keeps going down, the concern about delinquencies isn't been reduced, the industry is low margin. Of course, I own it for its dividend history, but that's good until it isn't. I'm holding for now, but very disappointed.

[The Stewardship Fund]

@hafen What are you disappointed with? They seem to be executing adequately.

[alphapecunia]

@hafen low margin industry?

[hafen]

@CaptainSpiff Too bad I didn't short it.

[mookdoc]

Right on the money! Impressive guided on point suck it Wall St your thugs were wrong...

[Secular_Income_Driven]

While I find the move into South America (Columbia) interesting, the company still hasn't proven that moving into mental health is a win. That's one reason I'm not excited that it's adding more behavioral health facilities in TX.

[Pinguino Investments]

@Secular_Income_Driven *Colombia

[jara-mill]

@Pinguino Investments - Thanks Pinguino...from a Colombian-American :)

[ChristopherSmith]

Long MPW and staying there….

[jara-mill]

@ChristopherSmith - Long MPW in my HSA. I hope it says this low for the rest of the year so that on my annual contribution next year, I can load up and lower my cost basis.

[RoseNose]

Long MPW and this is a very interesting and nice report with some positive FFO. A miss of 0.68M from 400.22 is (.68/400.22) = 0.17%. ...and its guiding even. It just raised the dividend / year to $1.16 with a yield of 6.86% at the price of 16.90. ....Nice !
Its a Hold and perhaps a buy more if it dips.

[Ray44]

@RoseNose Held this for several years now and have always been happy with it !

[Randol33]

Just as suspected after the last hour price action yesterday, someone leaked earnings data prematurely.

[Theta84]

35 cents of AFFO for the quarter... this equates to an 8.2% AFFO yield at a $17 stock price. Given the concerns that many investors have about MPWs tenants, I suspect the stock will trade lower on this report. A 9-10% AFFO yield makes much more sense to me given the risks. This works out to a stock price in the $14.00 -15.50 range.

[arnold.bird]

@Theta84 That’s an absurdly high yield, given the very low-risk nature of these investments, and the company’s history of success.

A lot of REITs are irrationally cheap right now, trading far below NAV. MPW is just one of many caught in the down draft

[Theta84]

@arnold.bird there are a ton of great high yield opportunities available to investors right now. You can find many companies with P/Es <6 or 7 and FCF yields over 15%. Given all these options, MPW should be trading at a higher AFFO yield in my opinion. I'd rather have a quality apartment REIT at a 5% implied cap rate than MPW with an 8% AFFO yield. The apartment REIT is much safer and a much more resilient business than MPW.

[arnold.bird]

@Theta84 “I'd rather have a quality apartment REIT at a 5% implied cap rate than MPW with an 8% AFFO yield”

You’re chasing fashion. I dumped my AVB earlier this year and glad I did. It was overvalued. I’m keeping my MPW, because it’s undervalued. I’ve been adding to GMRE, another medical REIT that’s also undervalued. My MPW position is substantially larger than my GMRE position, or else I would be adding to MPW instead of GMRE.
Good medical REITs at an 8% rate are much, much safer than an apartment REIT at 5%, imho.

UPDATE: I couldn’t lay off. I bought some more MPW.

[pcv71]

Not horrible and I’m in it long term and for the dividend.

[Ray44]

Nice work MPW !
Wonder what the WSJ can say negative about this report?
Probably talk about the private jets again.....
ZZZZ

[jara-mill]

@Ray44 - Haters (WSJ) gonna hate, so best to ignore the noise.

[Divinvst60]

I don't consider this bad news at all. Just a great chance to buy more. Great place to be for long term, can't replace hospitals.

[Zach Nye]

@Divinvst60 you can absolutely replace hospitals! Got a gunshot wound? Put some essential oils on it 🤪

[It Is All About The Timing]

@Zach Nye someone say essential oils?

Me: Off to buy $BG

😜

[jara-mill]

@Zach Nye - Or bleach...or Ultraviolet light :)

[Stefan Redlich]

Solid, that can't be called a miss!

[FirstFIREWealth_P01135809]

Well, if it dips, loading the truck

[jara-mill]

@FirstFIREWealth - What's the sound I hear?? Beep, beep, beep....oh it's a truck backing up :)