Medical Properties Trust Inc: Analyzing the Potential for Dividend Gains
This morning, we issued a “Potential Dividend Run Alert” for Medical Properties Trust Inc (NYSE: MPW) via our DividendChannel.com Dividend Alerts service. Let’s delve into the details.
Understanding the Dividend Run Concept
What exactly is a “Dividend Run”? This interesting concept was introduced to us at a previous ValueForum conference. To understand it, we should first familiarize ourselves with the ex-dividend date.
What Is the Ex-Dividend Date?
The ex-dividend date is the trading day when new buyers of a stock are no longer entitled to receive the upcoming dividend. To be eligible for a dividend payment, an investor must purchase shares before this date.
Typically, the stock price is expected to drop by the dividend amount on the ex-dividend date. For instance, if a stock pays a $0.08 dividend, it makes sense for the stock to decrease by this amount because any buyer after the ex-dividend date will not receive that dividend. If the stock price remains unchanged, buyers would be paying $0.08 more for a share without access to the dividend.
Why Might Stocks Rise Before Dividends Are Paid?
If the stock generally drops on the ex-dividend date, it stands to reason that there should be some upward movement prior to the payment of dividends. If a stock only fell with each dividend payout, its price would eventually decline to zero, which doesn’t make sense for a profitable company like Medical Properties Trust. Hence, there often exists a “built-in pressure” leading up to a dividend, creating what we call a potential Dividend Run.
Diverse Investment Strategies
The timing of purchasing shares can vary among dividend investors. Some choose to buy and sell around specific dates, while others adopt dollar-cost averaging. Investors may also buy shares shortly before the ex-dividend date, hold them for the dividend, and then sell afterward. Conversely, a common strategy is to sell a day before the ex-dividend date to capture the maximum capital gain, often buying about two weeks in advance.
Performance of Medical Properties Trust Dividends
For instance, consider the $0.08/share dividend that went ex-dividend on 09/09/24. On the last trading day before this date, shares closed at $4.93. Going back two weeks to 08/22/24, shares were at $4.54, which means they earned a $0.39 increase leading up to the dividend payout.
Tracking Dividend Run Success
Analyzing the last four dividends paid by MPW, this strategy would have resulted in capital gains exceeding the dividends three out of four times, with a total gain of $1.33 compared to the total dividend payout of $0.46. Here are the highlights:
| Ex-Dividend | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 12/12/24 | 0.08 | 11/26/24 | 4.26 | 12/11/24 | 4.11 | -0.15 |
| 09/09/24 | 0.08 | 08/22/24 | 4.54 | 09/06/24 | 4.93 | +0.39 |
| 06/10/24 | 0.15 | 05/23/24 | 5.04 | 06/07/24 | 5.37 | +0.33 |
| 04/19/24 | 0.15 | 04/04/24 | 4.23 | 04/18/24 | 4.99 | +0.76 |
| Dividend Total: | 0.46 | “Dividend Run” Total: | +1.33 | |||
What’s Next for Medical Properties Trust?
In a couple of weeks, Medical Properties Trust Inc (NYSE: MPW) will go ex-dividend for its latest payout of $0.08. Will history repeat itself this time?
Upcoming Dividend: $0.08/share
Ex-Div Date: 03/10/25
Payment Date: 04/10/25
Dividend Frequency: Quarterly
Full MPW Dividend History »
Looking Ahead
While past performance does not guarantee future results, it is clear that for investors interested in dividend opportunities, MPW stands out, especially with its implied annualized yield of 6.57%.
Stay tuned for more Dividend Run candidates. If you’d like to receive timely email alerts, sign up for our free Dividend Alerts service at DividendChannel.com.
Also see:
• Funds Holding XJUL
• BAFN Dividend History
• Top Ten Hedge Funds Holding QDEM
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
