GMA 7: Cruising Along

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Media network’s dividend yield supplants high yielders

GMA 7, 19 billion peso Philippines-based media broadcasting company, reported its annual 2017 results last week.

The company recorded 8% drop in revenue and 30% drop in its profits.

GMA recorded steady sales growth minus its 1.5 billion revenue windfall from the 2016 elections. GMA 7 generated 81% of its business revenue from its namesake channel.

“Minus the extra-ordinary election-related load last year, airtime revenues from regular advertisers ended at about the same level as last year.”

GMA 7 Filings

In 2017, GMA ended with 500 million in debt, 2.3 billion in cash, and 9.4 billion in book value.

What is more attractive is that the company has been a consistent dividend payer since 2005. GMA currently has a very attractive dividend yield of 8.8%.

In the US broad exchange traded funds, iShares iBoxx $ High Yield Corp Bond (ticker HYG) yielded at 5.54%.

In the past three years, GMA allocated 8.6 billion in financing activities most of which or 6.7 billion were provided as dividends to shareholders.

COL FInancial has a buy recommendation on GMA 7 with 8.50/share fair value. This blog’s estimate indicated 6.4/share.

Disclosure: No shares in GMA

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