PHILIPPINE STOCK MARKET SERIES - May 23, 2018 (Dividend Analysis: Battle of the Telco's)
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Here's my update for Today.
MARKET SUMMARY:
The PSEi declined on Monday, losing 11.85 points or 0.15% to 7,646.20.
Index decliners led gainers 15 to 14, while 1 issue remained unchanged. All sectors ended in red,
except for Industrial (+0.46%), with Mining & Oil (-1.59%) leading the decliners. Significant index
decliners were SCC (-3.04%), MPI (-2.06%), GTCAP (-1.97%), SMPH (-1.46%), and SECB (-1.45%).
Meanwhile, significant index gainers were MER (+2.31%), MEG (+1.96%), and AC (+1.49%).
Value turnover increased to Php4.8Bil from Php4.2Bil in the previous session. Meanwhile,
foreigners continued to be net sellers, disposing Php629Mil worth of shares.
SPECIAL EPISODE
BATTLE OF THE TELCO's
Personal Thoughts:
Part of of my stock dividend analysis is all about the telcos today. As you know both of these giants battle it out for supremacy in the telecomms sector in the Philippines. With the possible continuation of the price war and the looming telco threat i noticed a decline in revenues and a relatively flat result for TEL and GLO respectively.
In addition both of these companies are now investing record breaking CAPEX for 2018 in order to prepare for the new entrant (whoever it is, we will know by August as per DICT)
Nevertheless, i see the resilience of both stocks to provide dividends. Here's my thoughts on the two TELCO giants.
- Being the duoply they are now, the still managed to provide dividends in these toughest of times. Although the 3rd telco threat is looming, i believe the new player will have a lot of catching up to do in terms of reach.
- In terms of earnings, GLO has managed to have a relatively stable 2017 compared to a drastic drop for TEL. I'm a little perplexed with the sever drop in retained earnings of TEL but nevertheless they still chunk out that dividend. Although the dividend drop is an unwelcoming scenario, the price drop proves to be a "blessing in disguise" since we can now buy TEL at a discount (and hence a better dividend yield)
- Since i'm currently at paperloss in both telco's i am planning to hold these out. Why? i believe that both of these companies long built a reputation and at the same time their dividend policy remains intact despite the recent developments
Verdict: Who's the better pick?
Based on the charts above GLO has managed to provide better numbers compared to TEL now. But still TEL is not out of the game and recently their 1Q18 gave better results, i will check these in the coming months on how these will play out. As long as they are commited in giving out dividends. I'm good with them.
HOPING FOR YOUR FINANCIAL SUCCESS
WIL
Sources:
https://ph27.colfinancial.com/ape/Final2/research/downloads/2018-05-23-PH-D.pdf
FULL DISCLOSURE:
CPG,FGEN,FLI,GLO,GMA7,MER,MFC,SLF,TEL,VLL
DISCLAIMER: These articles are for educational and informational purposes only and do not consitute to any advice to buy or sell investments. To each is his/her own decision if they will do the recommendations stated here