Intrinsic value of Medical Properties Trust - MPW

Previous Close

$12.90

  Intrinsic Value

$2.23

stock screener

  Rating & Target

str. sell

-83%

Previous close

$12.90

 
Intrinsic value

$2.23

 
Up/down potential

-83%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as MPW.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MPW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.40
  39.40
  35.96
  32.86
  30.08
  27.57
  25.31
  23.28
  21.45
  19.81
  18.33
  16.99
  15.80
  14.72
  13.74
  12.87
  12.08
  11.37
  10.74
  10.16
  9.65
  9.18
  8.76
  8.39
  8.05
  7.74
  7.47
  7.22
  7.00
  6.80
  6.62
Revenue, $m
  541
  754
  1,025
  1,362
  1,772
  2,261
  2,833
  3,492
  4,242
  5,082
  6,013
  7,035
  8,146
  9,345
  10,629
  11,997
  13,447
  14,977
  16,585
  18,270
  20,033
  21,872
  23,789
  25,784
  27,860
  30,017
  32,259
  34,589
  37,010
  39,527
  42,144
Variable operating expenses, $m
 
  161
  218
  290
  377
  482
  603
  744
  903
  1,082
  1,281
  1,498
  1,735
  1,990
  2,264
  2,555
  2,864
  3,190
  3,533
  3,892
  4,267
  4,659
  5,067
  5,492
  5,934
  6,394
  6,871
  7,367
  7,883
  8,419
  8,977
Fixed operating expenses, $m
 
  89
  91
  94
  96
  98
  101
  103
  106
  109
  111
  114
  117
  120
  123
  126
  129
  132
  136
  139
  143
  146
  150
  154
  157
  161
  165
  169
  174
  178
  182
Total operating expenses, $m
  200
  250
  309
  384
  473
  580
  704
  847
  1,009
  1,191
  1,392
  1,612
  1,852
  2,110
  2,387
  2,681
  2,993
  3,322
  3,669
  4,031
  4,410
  4,805
  5,217
  5,646
  6,091
  6,555
  7,036
  7,536
  8,057
  8,597
  9,159
Operating income, $m
  342
  504
  716
  978
  1,299
  1,681
  2,129
  2,645
  3,232
  3,891
  4,621
  5,422
  6,294
  7,235
  8,242
  9,316
  10,454
  11,654
  12,916
  14,239
  15,623
  17,067
  18,572
  20,139
  21,768
  23,462
  25,223
  27,052
  28,953
  30,930
  32,985
EBITDA, $m
  440
  740
  1,035
  1,403
  1,851
  2,386
  3,012
  3,734
  4,555
  5,476
  6,497
  7,617
  8,835
  10,150
  11,558
  13,058
  14,648
  16,326
  18,090
  19,939
  21,872
  23,890
  25,993
  28,182
  30,458
  32,825
  35,285
  37,842
  40,498
  43,260
  46,131
Interest expense (income), $m
  139
  131
  188
  260
  349
  457
  587
  738
  913
  1,111
  1,333
  1,580
  1,850
  2,145
  2,462
  2,802
  3,164
  3,548
  3,953
  4,378
  4,824
  5,291
  5,778
  6,285
  6,813
  7,363
  7,934
  8,527
  9,144
  9,785
  10,451
Earnings before tax, $m
  219
  373
  528
  719
  950
  1,223
  1,542
  1,907
  2,319
  2,780
  3,288
  3,843
  4,444
  5,090
  5,781
  6,514
  7,290
  8,106
  8,964
  9,861
  10,799
  11,776
  12,794
  13,853
  14,955
  16,099
  17,289
  18,525
  19,809
  21,145
  22,534
Tax expense, $m
  -7
  101
  142
  194
  256
  330
  416
  515
  626
  751
  888
  1,037
  1,200
  1,374
  1,561
  1,759
  1,968
  2,189
  2,420
  2,663
  2,916
  3,180
  3,454
  3,740
  4,038
  4,347
  4,668
  5,002
  5,349
  5,709
  6,084
Net income, $m
  225
  273
  385
  525
  693
  893
  1,126
  1,392
  1,693
  2,029
  2,400
  2,805
  3,244
  3,716
  4,220
  4,755
  5,321
  5,918
  6,544
  7,199
  7,883
  8,597
  9,340
  10,113
  10,917
  11,752
  12,621
  13,523
  14,461
  15,436
  16,450

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  83
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,419
  8,872
  12,063
  16,027
  20,848
  26,596
  33,328
  41,087
  49,902
  59,786
  70,743
  82,766
  95,839
  109,942
  125,052
  141,146
  158,200
  176,194
  195,112
  214,942
  235,677
  257,318
  279,869
  303,343
  327,759
  353,141
  379,519
  406,930
  435,416
  465,026
  495,812
Adjusted assets (=assets-cash), $m
  6,336
  8,872
  12,063
  16,027
  20,848
  26,596
  33,328
  41,087
  49,902
  59,786
  70,743
  82,766
  95,839
  109,942
  125,052
  141,146
  158,200
  176,194
  195,112
  214,942
  235,677
  257,318
  279,869
  303,343
  327,759
  353,141
  379,519
  406,930
  435,416
  465,026
  495,812
Revenue / Adjusted assets
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
  0.085
Average production assets, $m
  5,063
  7,057
  9,595
  12,749
  16,583
  21,155
  26,510
  32,682
  39,693
  47,556
  56,271
  65,834
  76,233
  87,451
  99,470
  112,272
  125,837
  140,150
  155,198
  170,971
  187,465
  204,678
  222,616
  241,288
  260,709
  280,899
  301,881
  323,684
  346,343
  369,896
  394,384
Working capital, $m
  0
  -115
  -157
  -208
  -271
  -346
  -433
  -534
  -649
  -778
  -920
  -1,076
  -1,246
  -1,430
  -1,626
  -1,836
  -2,057
  -2,291
  -2,537
  -2,795
  -3,065
  -3,346
  -3,640
  -3,945
  -4,263
  -4,593
  -4,936
  -5,292
  -5,663
  -6,048
  -6,448
Total debt, $m
  2,909
  4,174
  5,769
  7,752
  10,162
  13,036
  16,402
  20,281
  24,689
  29,631
  35,110
  41,121
  47,657
  54,709
  62,264
  70,311
  78,838
  87,835
  97,294
  107,209
  117,577
  128,397
  139,673
  151,410
  163,618
  176,308
  189,497
  203,203
  217,446
  232,251
  247,644
Total liabilities, $m
  3,170
  4,436
  6,031
  8,014
  10,424
  13,298
  16,664
  20,543
  24,951
  29,893
  35,372
  41,383
  47,919
  54,971
  62,526
  70,573
  79,100
  88,097
  97,556
  107,471
  117,839
  128,659
  139,935
  151,672
  163,880
  176,570
  189,759
  203,465
  217,708
  232,513
  247,906
Total equity, $m
  3,248
  4,436
  6,031
  8,014
  10,424
  13,298
  16,664
  20,543
  24,951
  29,893
  35,372
  41,383
  47,919
  54,971
  62,526
  70,573
  79,100
  88,097
  97,556
  107,471
  117,839
  128,659
  139,935
  151,672
  163,880
  176,570
  189,759
  203,465
  217,708
  232,513
  247,906
Total liabilities and equity, $m
  6,418
  8,872
  12,062
  16,028
  20,848
  26,596
  33,328
  41,086
  49,902
  59,786
  70,744
  82,766
  95,838
  109,942
  125,052
  141,146
  158,200
  176,194
  195,112
  214,942
  235,678
  257,318
  279,870
  303,344
  327,760
  353,140
  379,518
  406,930
  435,416
  465,026
  495,812
Debt-to-equity ratio
  0.896
  0.940
  0.960
  0.970
  0.970
  0.980
  0.980
  0.990
  0.990
  0.990
  0.990
  0.990
  0.990
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
Adjusted equity ratio
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  225
  273
  385
  525
  693
  893
  1,126
  1,392
  1,693
  2,029
  2,400
  2,805
  3,244
  3,716
  4,220
  4,755
  5,321
  5,918
  6,544
  7,199
  7,883
  8,597
  9,340
  10,113
  10,917
  11,752
  12,621
  13,523
  14,461
  15,436
  16,450
Depreciation, amort., depletion, $m
  98
  235
  320
  425
  553
  705
  884
  1,089
  1,323
  1,585
  1,876
  2,194
  2,541
  2,915
  3,316
  3,742
  4,195
  4,672
  5,173
  5,699
  6,249
  6,823
  7,421
  8,043
  8,690
  9,363
  10,063
  10,789
  11,545
  12,330
  13,146
Funds from operations, $m
  266
  508
  705
  950
  1,246
  1,598
  2,009
  2,482
  3,016
  3,614
  4,276
  5,000
  5,785
  6,631
  7,535
  8,498
  9,516
  10,589
  11,717
  12,898
  14,132
  15,419
  16,760
  18,156
  19,607
  21,116
  22,683
  24,313
  26,006
  27,766
  29,596
Change in working capital, $m
  1
  -33
  -41
  -52
  -63
  -75
  -88
  -101
  -115
  -129
  -142
  -156
  -170
  -183
  -197
  -209
  -222
  -234
  -246
  -258
  -270
  -281
  -293
  -305
  -318
  -330
  -343
  -356
  -370
  -385
  -400
Cash from operations, $m
  265
  540
  747
  1,001
  1,309
  1,673
  2,097
  2,582
  3,131
  3,743
  4,418
  5,156
  5,955
  6,814
  7,732
  8,707
  9,738
  10,823
  11,963
  13,156
  14,402
  15,701
  17,054
  18,461
  19,925
  21,446
  23,026
  24,669
  26,376
  28,151
  29,996
Maintenance CAPEX, $m
  0
  -169
  -235
  -320
  -425
  -553
  -705
  -884
  -1,089
  -1,323
  -1,585
  -1,876
  -2,194
  -2,541
  -2,915
  -3,316
  -3,742
  -4,195
  -4,672
  -5,173
  -5,699
  -6,249
  -6,823
  -7,421
  -8,043
  -8,690
  -9,363
  -10,063
  -10,789
  -11,545
  -12,330
New CAPEX, $m
  -1,854
  -1,995
  -2,538
  -3,153
  -3,834
  -4,572
  -5,355
  -6,172
  -7,011
  -7,862
  -8,716
  -9,563
  -10,399
  -11,218
  -12,019
  -12,801
  -13,565
  -14,313
  -15,048
  -15,773
  -16,493
  -17,213
  -17,938
  -18,672
  -19,421
  -20,189
  -20,982
  -21,804
  -22,659
  -23,552
  -24,488
Cash from investing activities, $m
  -927
  -2,164
  -2,773
  -3,473
  -4,259
  -5,125
  -6,060
  -7,056
  -8,100
  -9,185
  -10,301
  -11,439
  -12,593
  -13,759
  -14,934
  -16,117
  -17,307
  -18,508
  -19,720
  -20,946
  -22,192
  -23,462
  -24,761
  -26,093
  -27,464
  -28,879
  -30,345
  -31,867
  -33,448
  -35,097
  -36,818
Free cash flow, $m
  -662
  -1,623
  -2,027
  -2,472
  -2,951
  -3,452
  -3,963
  -4,473
  -4,970
  -5,443
  -5,883
  -6,283
  -6,638
  -6,945
  -7,202
  -7,410
  -7,570
  -7,684
  -7,757
  -7,791
  -7,791
  -7,762
  -7,707
  -7,632
  -7,539
  -7,434
  -7,319
  -7,197
  -7,072
  -6,947
  -6,822
Issuance/(repayment) of debt, $m
  -385
  1,265
  1,595
  1,982
  2,410
  2,874
  3,366
  3,880
  4,407
  4,942
  5,479
  6,011
  6,536
  7,052
  7,555
  8,047
  8,527
  8,997
  9,459
  9,915
  10,368
  10,820
  11,276
  11,737
  12,208
  12,691
  13,189
  13,706
  14,243
  14,805
  15,393
Issuance/(repurchase) of shares, $m
  1,174
  999
  1,210
  1,457
  1,717
  1,981
  2,240
  2,487
  2,714
  2,913
  3,079
  3,206
  3,293
  3,336
  3,335
  3,292
  3,206
  3,079
  2,915
  2,716
  2,485
  2,224
  1,936
  1,624
  1,291
  938
  568
  183
  0
  0
  0
Cash from financing (excl. dividends), $m  
  771
  2,264
  2,805
  3,439
  4,127
  4,855
  5,606
  6,367
  7,121
  7,855
  8,558
  9,217
  9,829
  10,388
  10,890
  11,339
  11,733
  12,076
  12,374
  12,631
  12,853
  13,044
  13,212
  13,361
  13,499
  13,629
  13,757
  13,889
  14,243
  14,805
  15,393
Total cash flow (excl. dividends), $m
  106
  641
  779
  968
  1,177
  1,403
  1,643
  1,894
  2,152
  2,413
  2,675
  2,935
  3,191
  3,442
  3,688
  3,928
  4,163
  4,392
  4,618
  4,840
  5,061
  5,282
  5,505
  5,730
  5,960
  6,195
  6,439
  6,691
  7,171
  7,858
  8,571
Retained Cash Flow (-), $m
  -1,146
  -1,271
  -1,595
  -1,982
  -2,410
  -2,874
  -3,366
  -3,880
  -4,407
  -4,942
  -5,479
  -6,011
  -6,536
  -7,052
  -7,555
  -8,047
  -8,527
  -8,997
  -9,459
  -9,915
  -10,368
  -10,820
  -11,276
  -11,737
  -12,208
  -12,691
  -13,189
  -13,706
  -14,243
  -14,805
  -15,393
Prev. year cash balance distribution, $m
 
  83
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -548
  -816
  -1,015
  -1,234
  -1,471
  -1,723
  -1,986
  -2,256
  -2,530
  -2,804
  -3,077
  -3,345
  -3,609
  -3,867
  -4,119
  -4,364
  -4,605
  -4,841
  -5,075
  -5,306
  -5,538
  -5,771
  -6,007
  -6,248
  -6,495
  -6,750
  -7,015
  -7,072
  -6,947
  -6,822
Discount rate, %
 
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
 
  -504
  -687
  -773
  -844
  -895
  -922
  -925
  -905
  -862
  -801
  -727
  -645
  -558
  -472
  -389
  -314
  -247
  -190
  -142
  -104
  -74
  -51
  -34
  -23
  -14
  -9
  -5
  -3
  -2
  -1
Current shareholders' claim on cash, %
  100
  82.1
  69.0
  59.1
  51.5
  45.5
  40.7
  36.9
  33.8
  31.3
  29.2
  27.5
  26.1
  24.9
  23.9
  23.0
  22.3
  21.7
  21.2
  20.8
  20.5
  20.2
  20.0
  19.9
  19.8
  19.7
  19.6
  19.6
  19.6
  19.6
  19.6

Medical Properties Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in and owning net-leased healthcare facilities across the United States and selectively in foreign jurisdictions. The Company's segment is its investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in its tenants. The Company conducts its operations through MPT Operating Partnership, L.P. The Company acquires and develops healthcare facilities, and leases the facilities to healthcare operating companies under long-term net leases. The Company makes mortgage loans to healthcare operators collateralized by their real estate assets. As of February 24, 2017, the Company's portfolio consisted of 232 properties, including 215 facilities (of the 220 facilities that it owns) were leased to 30 tenants, five were under development, and the remaining assets were in the form of mortgage loans to four operators.

FINANCIAL RATIOS  of  Medical Properties Trust (MPW)

Valuation Ratios
P/E Ratio 18.4
Price to Sales 7.6
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 15.6
Price to Free Cash Flow -2.6
Growth Rates
Sales Growth Rate 22.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.6%
Cap. Spend. - 3 Yr. Gr. Rate 21.6%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 89.6%
Total Debt to Equity 89.6%
Interest Coverage 3
Management Effectiveness
Return On Assets 6.1%
Ret/ On Assets - 3 Yr. Avg. 5.2%
Return On Total Capital 3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 2.9%
Return On Equity 8.4%
Return On Equity - 3 Yr. Avg. 6.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 99.4%
Gross Margin - 3 Yr. Avg. 99.3%
EBITDA Margin 84.3%
EBITDA Margin - 3 Yr. Avg. 73.3%
Operating Margin 63%
Oper. Margin - 3 Yr. Avg. 56.1%
Pre-Tax Margin 40.5%
Pre-Tax Margin - 3 Yr. Avg. 29.6%
Net Profit Margin 41.6%
Net Profit Margin - 3 Yr. Avg. 29.9%
Effective Tax Rate -3.2%
Eff/ Tax Rate - 3 Yr. Avg. -0.8%
Payout Ratio 96.9%

MPW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MPW stock intrinsic value calculation we used $541 million for the last fiscal year's total revenue generated by Medical Properties Trust. The default revenue input number comes from 2016 income statement of Medical Properties Trust. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MPW stock valuation model: a) initial revenue growth rate of 39.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.6%, whose default value for MPW is calculated based on our internal credit rating of Medical Properties Trust, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Medical Properties Trust.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MPW stock the variable cost ratio is equal to 21.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $87 million in the base year in the intrinsic value calculation for MPW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.5% for Medical Properties Trust.

Corporate tax rate of 27% is the nominal tax rate for Medical Properties Trust. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MPW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MPW are equal to 935.8%.

Life of production assets of 51.7 years is the average useful life of capital assets used in Medical Properties Trust operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MPW is equal to -15.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3248 million for Medical Properties Trust - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 363.57 million for Medical Properties Trust is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Medical Properties Trust at the current share price and the inputted number of shares is $4.7 billion.

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Financial statements of MPW
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