- Tariff-based uncertainty is making near-term interest rates a toss-up for income investors, highlighting the evergreen need for portfolio stability
- A dividend-paying healthcare stock with strong fundamentals and ballast potential is Medical Facilities (TSX:DR), which owns top-rated surgical facilities in the United States
- Medical Facilities stock has added 235.62 per cent since 2020
As US President Trump’s tariffs work their way through the US court system, it’s anybody’s guess what will happen next in the ongoing rigamarole that is global trade, making it difficult for central banks to determine optimal interest rate policies moving forward.
Despite a growing consensus for cuts in September from the U.S. Fed and the Bank of Canada, the risks of tariff-based inflation and stoking a resilient North American consumer base, despite a slowing labour market, remain front-and-centre, pointing to the need for portfolio stability, especially if you depend on the income it produces to meet your monthly or quarterly spending needs.
A dividend-paying stock with strong fundamentals to boost portfolio stability is Medical Facilities, market capitalization C$276.21 million, whose underlying company owns a portfolio of surgical centres in the United States, including controlling interests in three specialty surgical hospitals in Arkansas, Oklahoma and South Dakota, and an ambulatory surgery center in California, with a focus on mostly orthopedic and neurosurgical procedures.
This content has been prepared as part of a partnership with Medical Facilities Corp., and is intended for informational purposes only.
Revenue, derived primarily from private insurance (49 per cent) and Medicare/Medicaid (40 per cent), grew steadily from US$363 million in 2020 to US$445 million in 2023, decreasing to US$331 million in 2024 following a strategic asset sale. Net income grew exponentially over the period from US$8.81 million to US$73.49 million, respectively, supported by controlled short-term debt and decreasing long-term debt, substantiating management’s ability to turn an increasingly efficient profit.
Backed by a U.S. senior population expected to grow into the next decade, according to slide 7 of the company’s August 2025 investor presentation, as well as US$49 million in cash as of Q2 2025, Medical Facilities is focused squarely on enhancing shareholder returns through improved services and share buybacks, having re-purchased 4.3 million shares for US$55 million in 2025 as of August 1, 1.7 million and US$16.6 million in 2024, and 10.7 million and US$107 million since September 2022, with only 18.6 million shares outstanding to date.
When we tie it all together with Medical Facilities’ leadership team, including a seasoned CEO with an accounting and M&A background, and a CFO with substantial healthcare experience, there’s a strong case for conviction in the company continuing to foster its high patient experience ratings (slide 6), print cash and create shareholder value moving forward.
Medical Facilities’ operational health and prospective future bode well for the healthcare company’s quarterly dividend, which has been stable between C$0.07 and just over C$0.09 since 2011, and accounts for a 2.4 per cent yield at a payout ratio of only 32.4 per cent as of Q2 2025.
With Medical Facilities stock (TSX:DR) having added 235.62 per cent since 2020, last trading at C$14.74, while remaining well below its pre-COVID high of C$23.11 in 2016, the momentum behind this essential services provider feels far from over.
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