How To Earn $500 A Month From Medical Properties Trust Stock

Shares of Medical Properties Trust Inc MPW are up more than 13% over the last month following a well-received presentation at Nareit’s annual REITweek Investor Conference.

The real estate investment trust (REIT) said it secured $1.4 billion in transactions, which includes hospital sales and loan repayments, which should cover the company’s debt maturities for 2023 and 2024, a key concern for its investors.

MPW's announcement bolstered confidence in the company’s financial stability, and shed light on its high dividend yield of 12%.

So, how can an investor earn $500 a month from Medical Properties Trust stock?

Equity appreciation aside, an investor can yield $500 from its dividends — let's break it down.

To yield $500 per month, which translates to $6,000 annually, an investor would need an investment of about $50,000 to buy about 5,181 shares of MPW. If the aim is a more modest amount, say $100 per month or $1,200 annually, the required investment would be $10,000, or 1,036 shares of the stock.

To calculate, we divided the desired annual income ($6,000 or $1,200) by the dividend yield (0.12 in this case). So, $6,000 / 0.12 = $50,000 ($500 per month), and $1,200 / 0.12 = $10,000 ($100 per month).

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Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

Here’s a simple explanation of how that works: the dividend yield is computed by dividing the annual dividend payment by the stock’s current price.

For instance, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).

Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield.

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