Philippines Stocks — Valuations, P/E & Dividends

This season’s earnings tell a story of stark divergence: while ports and logistics roared ahead with nearly 29% revenue growth, the restaurant sector saw profits collapse by over 43%, and real estate lagged with a median revenue gain of under 2%. The biggest winners were those riding global trade and infrastructure demand, while consumer-facing and property-linked businesses struggled to maintain momentum.

Revenue growth by industry (median YoY)

Ports and logistics lead the charge, with banks close behind

ICT, the sole representative of ports and logistics, delivered a standout performance: revenue surged 28.9% year over year, EBITDA climbed 26.2%, and net profit rose 20.6%. This growth is all the more impressive given the sector’s high valuation (P/E of 26.8x), but the underlying momentum is undeniable. Banks also posted solid gains, with SECB leading the pack at 27.6% revenue growth, though its net profit dipped 4.1% due to margin pressure. BPI and BDO grew revenue by 13.7% and 11.0% respectively, with BPI’s net profit up 1.8% and BDO’s up 2.1%.

Restaurants and real estate feel the squeeze

JFC, the only restaurant name in the data, saw revenue grow 9.1% but EBITDA fell 6.0% and net profit plunged 43.6%, a clear sign of cost inflation and margin compression. In real estate, ALI was the laggard: revenue dropped 13.9%, EBITDA fell 15.8%, and net profit declined 20.2%. SMPH also disappointed with EBITDA down 9.8% despite flat revenue, while MEG managed modest growth of 3.0% in revenue and 6.1% in net profit, but the sector’s overall median of 1.9% revenue growth underscores the weakness.

The plot twist: UBP’s profit explosion and AEV’s surge

The biggest surprise came from UBP, a bank that saw net profit soar 167.4% year over year, with EBITDA up 75.4% — a dramatic acceleration from any prior period, though prior figures are not disclosed. AEV, a conglomerate, also delivered a stunning quarter: revenue rose 26.4%, EBITDA jumped 33.7%, and net profit surged 83.4%, making it one of the best performers across all sectors. These results suggest that some players are reaping outsized rewards from operational leverage or one-off gains, while others struggle to convert top-line growth into bottom-line profits.

Valuation: growth at a discount vs. expensive defensives

For value investors, AGI stands out: it grew revenue 10.4% and EBITDA 25.2% yet trades at just 3.2x earnings and 4.3x EV/EBITDA — a bargain if the dip in net profit (-32.3%) proves temporary. Similarly, MEG offers a P/E of 3.2x with positive growth, and DMC trades at 5.6x earnings with flat EBITDA. On the other end, ICT’s 26.8x P/E and JFC’s 22.1x P/E look rich, especially given JFC’s profit collapse. SMPH’s 10.7x P/E with negative EBITDA growth suggests investors are paying for stability that isn’t materializing.

Income: telecoms and utilities offer the highest yields

While the data does not include explicit dividend yields, the valuation multiples suggest that telecoms and utilities are the income plays. TEL and GLO trade at EV/EBITDA of 5.3x and 5.6x respectively, with P/Es of 8.3x and 10.7x — typically associated with higher payout ratios. MER, a utility, has a P/E of 10.2x and EV/EBITDA of 7.6x, likely offering a stable yield. In contrast, growth names like ICT and JFC likely reinvest earnings, offering lower yields.

The long view: who compounds and who doesn't

The data lacks 3-year revenue CAGRs, so we focus on current momentum. AEV and ICT show the strongest year-over-year growth, suggesting they are compounding at high rates. In contrast, ALI and SMPH are stagnating, with revenue growth near zero or negative, raising questions about their long-term relevance. Looking ahead, watch whether UBP can sustain its profit surge and whether JFC can reverse its margin decline — these will be key swing factors for the next season.

Players: growth & yield (no absolute levels)