FFO is very predictable as MPW has almost no operating expenses and revenues are off of long term leases. Expenses are well below most other REITs.
No dividend hike while the markets are in turmoil, but no cut likely either.
FFO will be slightly impacted by the sale of $500 million of properties and long term financing for another $600 million or so at about 6%. This appears to be why their guidance was slightly off.
The tenants are doing well. The largest tenant company is down to 19% of revenues and the largest property is only 2% of revenues.
The days of rapid growth are over for now. Trying to get debt to EBITDA down to 5.5, currently at 6.0. This indicates acquisitions will be muted this year and probably next. Despite this, FFO should still increase at low to mid single digit rates over that time.
These guys are smart to hunker down. The market should recognize the stability of their cash flows and low multiple to FFO sometime this year. With long term interest rates declining, a stable 8%+ dividend will become very appealing.
at least there's a HINT that folks know the difference...BKD & HCP announced today, with BKD having weakness in SNF business and HCP relying to heavily (imo) upon it for its own success...took others down, as well. at least we got confirmation from MPW via the CC that things are looking GREAT here. just gotta convince the WS guys.
yes, the payout ratios were especially good news...I, too, can see a raise if debt levels all but disappear and FFO rises. forecast was for 4-5% increase, right?
I don't see an increase in the dividend anytime soon, and they don't need to at the current levels. Square up the balance sheet & the stock will move quickly. The current dividend yield at 8% is a gift. Even more impressive is the fact it is safe.
Management lost out on stock options, because of the stock's poor performance. Now they will quickly remake the balance sheet, issue 8-yr bonds & sell off under performing properties to pay down their revolver. With bond yields down & the improvement in MPW's debt structure coming, this is a go to stock for those seeking income.
DE-LEVERAGING IS PRUDENT!!!! pardon any inaccuracies...sounds like ONLY $125MM in late 2016 debt maturities...potential $500MM bond offering (maybe 8-10 years) coming will help offset part of $1.1B of revolver, leaving only another $500-600MM to pay off from asset sales. also, asset sales interest of up to $900MM - being approached (unsolicited) vs. putting up for sale! significant potential gains from such sales, possibly by mid-year...other asset sales are possible, given quality of & demand for assets under MPW management. wow. long-term SOLID! still building four new Adeptus facilities - impressive! feel free to comment & discuss...
PLEASE KEEP ALL MANAGEMENT TEAM IN PLACE!!! low payout ratio provides opportunity later for any raise in divvy, depending on market conditions...again, very conservative, and imo PRUDENT!!!
agree with all except that debt is not expensive for MPW, imo. why refi, if was just refi'd? can service debt until the end of time, right? I like the news of new-build Adeptus facilities, and am anxiously awaiting call.
Too much debt. Scale of revolver is daunting. Street is assuming capital markets are shutting down and MPW will not be able to refinance. In earnings call, all attention will be on number and timing of asset sales and the impact on debt. Its 2008 all over again.
again, lumped in with all the others...management may need to do some re-education of the street to differentiate MPW from the rest, which are more LTC in nature...
just want to hear the "official" scoop on what 2016 holds for us. this has been a long-term holding going back to the $18's, and I'm not sure it doesn't belong right back there TODAY!!! just gotta get everyone "educated" imo...exposure...visibility among other health care REIT investors...we'll get there.
how do you figure the contemplated asset sales into that? would have to increase FFO with reduced interest exp as they apply profits to debt, right? guess we'll hear plans on the call. REITs buy AND sell, depending on their needs; I hope Aldag lays out a strategy on the call at 11. good luck!
They Just Raised The Divvy Last Year About This Time.There FFO FALLS SHORT for 2016.IMO they can not raise it!
as the release states, the assets held by MPW are in demand from others...that corresponds with my gut feeling that Aldag and Co know their business, diversified the portfolio at a time that was advantageous for the company long term AND for shareholders, and that any debt assumed to enable that growth was planned for accordingly and (if rates ever rise again) will be dealt with swiftly. the fact that the operators of the portfolio properties are experience growth and success is also testimony that MPW continues to attract quality tenants. kudos!!!
Now if MPW could command the 60's PE multiple that HCP has.
Both companies have similar EPS and operating/gross margins.
fyi: any doubters of MPW should read the SA article from 11/5/15...imo
from the release: (this kind of says all I needed to hear to make my day...)
“Over the last three years we have more than doubled MPT’s assets to almost $6 billion, increased per share normalized FFO by more than 40%, improved our dividend payout ratio by 20%, reduced our single tenant concentration by 9% and achieved an investment grade rating on our unsecured debt,” said Edward K. Aldag, Jr., Chairman, President and CEO of the Company. “In addition, our tenants continue to report strong operating and financial results. As of the end of 2015’s third quarter, our same store lease coverages were at least as strong across all property types as in the prior year period,” Aldag continued. “By all of these objective measures, MPT has been among the leaders in the healthcare REIT sector.”
Aldag also noted, “In an indication of the attractiveness of our assets, we have recently received unsolicited indications of interest from real estate and healthcare investors for certain of our assets across the property spectrum. These assets represent $900 million of value, and we are considering selective sales of a portion that, when combined with planned permanent financing, would substantially reduce our outstanding revolver balance.”