Charlie, I sold all my MT stock some time ago in the 15 -17 range. I also noticed the current 15% yield on MT, and wondered if I should buy back in.
It seems to me that there are two risks. First, the Medicare Prospective Payment System has significantly reduced the payments that will be made to doctors, hospitals, etc. and there are similar reductions in Medicaid which will reduce the Medicaid reimbursements to nursing homes, doctors, hospitals, etc. It is possible some tenants may not be able to meet the lease payments and some leases may require redoing.
Second, MT's financial picture has been a big mess. Can we rely on management's declaration of $0.46 a quarter as a recurring quarterly dividend for the future? I believe management thinks so, but management's record hasn't been inspiring. Of course, the CEO is new and has made a lot of progress since taking over.
I haven't bought any MT, but it might be OK as a speculation. I believe the reason for the 15% yield is that people don't have confidence in MT yet. If someone buys, and a year or two goes by without further problems, the price of MT should rise to $18 or more. So you have a chance to make 15% while you wait, and could make more if everything works out.
Good luck, |
