
The S&P 500, a perfectly sound index, is presently offering a yield of about 1.2%. The average REIT, a generally sensible sort of investment, manages a respectable 3.8%. So, when one encounters a REIT dealing in essential properties boasting a 6.6% yield, a prudent investor—or, indeed, anyone with a functioning brain—is obliged to inquire as to the reason. In this instance, the answer is rather straightforward: Medical Properties Trust has, shall we say, adjusted its dividend payouts. Not once, mind you, but twice! The initial attempt at a turnaround didn’t quite come off as planned, and the share price has rather taken a tumble over the last five years, falling by approximately 75%. The root of the trouble? A touch too much borrowing, you see. When tenants found themselves a bit short on funds, the balance sheet lacked the necessary muscle to absorb the blow.