Since the start of 2022, Medical Properties Trust (MPW -2.51%) has lost a staggering 75% of its value. Concerns about its troubled tenants, poor financials, and multiple dividend cuts have made this a disastrous investment to own over the past few years. Recently, however, the real estate investment trust (REIT) stock has been starting to pick up steam, rising roughly 50% since the start of 2025.

Could it be headed for more gains, or is it still too risky an investment for most portfolios?

An improved financial position gives Medical Properties stock a big boost

On Feb. 27, Medical Properties reported its fourth-quarter results. For the period, its funds from operations (FFO) were negative $36.1 million. While that's not positive, it's still a significant improvement from the $454.5 million FFO loss it reported during the same period of 2023.

The healthcare-focused REIT has been selling assets in order to pay down its debt, which totaled $8.8 billion as of the end of the year, down from more than $10 billion a year earlier. Management also says that due to a $2.5 billion private offering of senior notes, it will be able to take care of its debt maturities through to October 2026, and that it will have an estimated $1.4 billion in liquidity via cash and what's available through its line of credit.

Meanwhile, Medical Properties has also been transitioning hospitals from one of its troubled tenants, Steward Health, which entered bankruptcy protection last year, to other operators. Investors appear to be hopeful that the REIT's future results will be stronger, and that better days will be ahead for the stock.

The day before the release of its earnings report, the healthcare stock closed at $4.77. By the end of last week, it was up to $6.02 at Friday's market close, an impressive 26% rally in less than two weeks.

The dividend is much smaller, but still may not be safe

Medical Properties Trust's financial health is showing signs of improvement as its debt load comes down, but with a negative FFO, there's still ample risk with this investment. The REIT has slashed its dividend twice in less than two years, and its current quarterly payout of $0.08 per share is just a fraction of the $0.29 per share it was distributing as recently as 2023.

The sustainability of even that reduced dividend is still in question as Medical Properties remains unprofitable. And as it has been selling assets to raise cash, even if it returns to profitability, its future earnings will likely be much leaner than they have been in the past.

This is a business that's still in the midst of a turnaround and fixing up its operations.

Medical Properties Trust still looks like a speculative play

There has been a lot of volatility to the stock. And given the many question marks still hovering around its financials, I believe it's still too early to make a good decision on the stock right now -- a wait-and-see approach may be the most appropriate strategy. Some investors may be betting that the worst is over and that the stock has bottomed out, but that can be a highly risky premise upon which to invest in any company.

Overall, this isn't an investment that is going to be suitable for most investors, and while its yield may look both attractive and more reasonable at 5% versus the more than 10% it was at in the past, this is still by no means a safe buy. If you want a good dividend stock that you can safely buy and hold, there are far better options to consider than Medical Properties Trust. High-risk investors who believe in the business may feel compelled to take a chance on the stock amid this rally, but this isn't an investment you can just buy and forget about.