AP should learn from GMA Network (GMA7) that the proof of the pudding is in the eating. GMA7 a traditional-free-to-air broadcasting company saw a significant rise in share price when it declared 1.35 cash dividend.
At the time of the dividend declaration GMA7 was just trading at a day high of 7.49 a share. The dividend yield at that period would be 18%. The massive dividend sent GMA7 soaring to a high of 14.88.
Even a buggy whip and a traditional business could soar to the moon if it can deliver a very generous yield.
Aboitiz Power’s press release about the company spending on renewable energy didn’t move the needle. Not even the notion of a big retail brokerage that AP is a big bright market idea pushed AP’s share price up. Market could not be made to ignore that Aboitiz Power (AP) is a major coal plant operator. There is no wrong being a coal plant operator except that big funds believe that they could go stranded within the decade as coal prices soar to the moon amidst push for a net-zero world.
No amount of spin can push AP up. AP should send more of the earnings to the shareholders for it to soar up. Decent yield is not enough, AP should take it from GMA7.
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