Medical Facilities Corp.

DR-T

Three quarters in a row of disappointing results. Made a very dramatic dividend cut. Yield is now around 4%. Stock is bouncing in the $4-5 range. Owns medical building in the States. Debt to equity ratio is not too severe. Suspects they will be able to paydown debt now. Disappointing story but continues to hold it. Hasn't decided to buy more yet. Would like to see a couple more quarters and see if the business stabilizes.

He has had grief with this over the years. It only trades at 13 times earnings and a great yield but a payout ratio of 167%. It has missed earnings. Although it is cheap, it does not have good price momentum. Yield 14%

He doesn't cover it, but DR had a disastrous quarter and the wheels came off. He doesn't understand the reason why. He's scared of it. Also, their debt is high. Pays a 14% dividend which likely isn't safe.

They have a strong balance. The dividend is fine. But the issues revolve around their clinics. A new public hospital has stolen some business in South Dakota, and DR had two quarters. He averaged down this year and comfortable to hold it. But he'll keep an eye on the next quarter.

He owns this and tries to buy it under $14 and selling over $16, while collecting a fat dividend. Their recent earnings were less profitable and the company says things will improve going forward. In South Dakota there could be competitive pressure as a large hospital facility has been built. He thinks there is no end of demand for users. He would buy here.

Did they raise the dividend just to keep investors interested, and is that 9.28% yield stable? Their payout ratio is beyond 100%, a concern. He has owned this in the past. They missed earnings. Decent valuation at 5x EBITDA and cash flow. Balance sheet is okay. They might be able to maintain that dividend. The stock price is a challenge--can it rise? And they need a highly valued stock in order to be a growth-by-acqusition stock. (He isn't aware of a dividend increase, though.)

He sold it around $16-17, but still owns it. He would add more shares now. Their Q1 numbers were poor with low Medicare reimbursement rates. The street is worried about new competition. Look at the next earnings, which could boost the stock.

The 12% drop on May 9 has continued and not recovered. Markets have a lot of concern about the dividend. Be very careful. Reduce your position for sure. If it drops below $12, could really tumble. Lots of risk right here. Volume is weak.

They had a weak quarter. People are worried about the debt level which is high. He likes the business model. It will work out over the long term. He will probably buy in 2-3 months when he gets more comfortable with the situation.

He feels the pain in the sell off as he owns it. It trades 6 times cash flow. He doesn't think they are over levered, but feels the dividend may be at risk. Watch this closely. Yield 7%.

He's researched this a lot. It's a roll-up strategy buying hospital centres which he likes; it has a decent runway. Their last few acquisitions have dogged them with weak growth. They need to execute in the next few quarters before he steps in. They need to get over the hump.

5-year outlook He's trimmed his holdings as it rallied to $16. There's competition coming in South Dakota. Long-term it depends on how well they acquire new surgical centres.

The company operates a series of surgical clinics and drop in clinics. The dividend is safe. Their debt is high but they own a lot of real estate so that justifies it.

Pretty good and boring. Hold during market downturns. A sideways trend and a high yield is positive. In a $14-16 trading range. A pretty safe stock. If it breaks through $14, sell.

(A Top Pick Dec 11/17, Up 21%) Pays over 7% dividend. This stock could really go. They own little surgical hospitals and outpatient clinics. They have a deal where doctors own the real estate and manage, while they share in the profits with DR. A very good model