Philippines Stocks — Valuations, P/E & Dividends

This season's earnings paint a stark picture of divergence: while ports and banks charge ahead with double-digit revenue growth, conglomerates and real estate lag, and one restaurant giant's profit collapse stands out as a warning. The median revenue growth across industries ranges from a robust +28.9% in ports to a sluggish +1.4% in conglomerates, but the real story lies in the individual outliers—both the stars and the laggards—that are reshaping the investment landscape.

Revenue growth by industry (median YoY)

Ports and banks are the clear winners, with ICT and UBP leading the charge

The standout performer is ICT, the sole ports & logistics player, with revenue up an impressive +28.9% year over year, EBITDA +26.2%, and net profit +20.6%. This growth is not just a blip—it's the strongest revenue expansion across all industries, and it comes with a reasonable valuation at 28.3x P/E and 15.2x EV/EBITDA, suggesting the market is paying for quality but not overpaying. In banking, UBP is the surprise star: revenue rose +8.9%, but EBITDA surged +75.4% and net profit skyrocketed +167.4%, a clear sign of operational leverage and cost discipline. SECB also impressed with revenue up +27.6%, though its net profit dipped -4.1%, showing that revenue growth doesn't always translate to the bottom line.

Conglomerates and real estate are the laggards, with AGI and ALI dragging the pack

On the flip side, AGI, a conglomerate, posted the worst revenue decline at -18.8%, with net profit down -28.7%, and it trades at a distressed 2.7x P/E—a value trap unless the business stabilizes. In real estate, ALI is the clear laggard: revenue fell -13.9%, EBITDA -15.8%, and net profit -20.2%, while its 5.8x P/E suggests the market sees little near-term recovery. Even SMPH, a real estate heavyweight, managed only +0.9% revenue growth with EBITDA down -9.8%, underscoring the sector's malaise.

JFC's profit collapse is the plot twist, despite steady revenue growth

The biggest surprise comes from JFC, the restaurant operator: revenue grew +9.1% year over year, but net profit plunged -43.6%, a dramatic reversal from the prior period's +20.1% profit growth. EBITDA fell -6.0%, signaling severe margin compression—likely from higher input costs or operational inefficiencies. This is a classic case of top-line growth not translating to bottom-line value, and it makes JFC's 21.8x P/E look expensive for a company with shrinking profits.

Cheap or expensive: AGI and MEG look like value traps, while MER and SM are priced for perfection

For value investors, the screen is mixed. AGI trades at just 2.7x P/E and 5.8x EV/EBITDA, but with revenue declining -18.8%, it's a classic value trap—cheap for a reason. MEG, in real estate, offers a 3.1x P/E and 4.3x EV/EBITDA with +3.0% revenue growth, but its net profit rose only +6.1%, so the low multiple reflects skepticism. On the expensive end, MER, a utility, trades at 48.3x P/E and 45.7x EV/EBITDA despite just +5.5% revenue growth and -5.7% EBITDA decline—priced for perfection with no growth to justify it. SM, a conglomerate, at 24.7x P/E and 24.4x EV/EBITDA with +4.9% revenue growth, also looks rich.

Income investors should look to banks and real estate for yield, but watch for sustainability

While the data doesn't provide explicit dividend yields, the low P/E ratios in banks and real estate suggest attractive dividend potential. For instance, MBT at 5.9x P/E and SECB at 4.4x P/E likely offer yields above the market, given their stable earnings. However, investors must be cautious: SECB's net profit fell -4.1%, which could pressure dividends. In real estate, RLC at 5.7x P/E and ALI at 5.8x P/E may offer high yields, but ALI's profit decline of -20.2% makes its dividend less secure.

The long view: AEV's momentum and UBP's turnaround stand out, but watch for sustainability

Looking beyond the quarter, AEV, a conglomerate, is a standout with revenue up +26.4%, EBITDA +33.7%, and net profit +83.4%, trading at a reasonable 9.5x P/E—a rare combination of growth and value. UBP's profit surge of +167.4% is remarkable, but with revenue growth of only +8.9%, investors should question if it's sustainable or a one-off. As we look ahead, the key question is whether banks can maintain their momentum and whether conglomerates can reverse their decline. Watch for margin trends in the next quarters.

Players: growth & yield (no absolute levels)