When i first bought this reit, i believe the yield was around 8% , now i see it's 6.3%, it's seems like a classic bait & switch to me ? If inflation gets higher, investors will be getting about 2% & possibly stuck in this investment! Im staying long MPW for now but am I missing something ?
The yield of .80 per share has remained unchanged for years. The only reason the yield % has declined is because of the appreciation of the stock price. I.E. when the stock was $10, .80/$10 = 8%. However, now that the stock price is almost $13, .80/13 = 6.2%. How do you figure it is a bait and switch?? Also, if you bought the stock with an 8% yield, YOU are still getting an 8% yield on your investment. The yield of 6.2% is only based on purchasing at the current market price.
Thanks for the breakdown, I figured my shares & it does comes out to 8%, so your always getting .80 a share per year on every share is what your saying or .20 every quarter. To my concern on the bait & switch, an investor buys XYZ stock for a certain yield & then it drops, like many of us, I only have a certain amount of capital to allocate towards investments, so I watch yields closely. Yields do drop on some stocks but I guess reits are different. I'm staying long
I read recently somewhere that management is preparing to increase their distribution shortly. Also the distribution is partially return of capital so therefor that part of the distribution is currently not taxable but reduces your cost basis so if and well you sell the lower cost basis would increase your capital gains. If you don't sell and the price and distribution continue to rise you get the cash tax free.. Management expects a lot more growth (Buying additional properties ) in 2013 and going forward to fuel the higher distributions which should fued the share price growth.
If the market is in an overall decline and management continues their plan shares will remain cheap and available for acqumulation at low prices.
This company buys medical care facilities. People are living longer and there is no shortage or sick people that need them Right now 10,000 people reach 65 everyday in the US.. There are 70,000 people over 100 in the US currently. By 2050 there will be 600,000 seniors ofer 100 years of age.
I believe MPW is a growth business for the long term with a lot of current tax deferred income for the investor that thinks long term.