LTG: Still One of the Best Dividend Stocks in the PSE?

[00:00:00]LTG is currently one of the highest yielding dividend stocks PSE. Dividend yield at the price of 14.52 is 10.67%.

[00:00:12]Kung sa pera account sa Dragon 5 mo bibilihin ang LTG, tax-free ang dividend niya. Kaya buong-buo mong makukuha ang 10.67% dividend. Dati tatlo silang favorites ng mga dividend investors ang LTG, DMC, and SCC. Dahil sa uncertainty ngayon sa Semirara's coal operating contract at sa pagkaka-delay ng COC bidding, affected din ang cash dividend declaration nila.

[00:00:40]DMC pa lang ang nag-declare ng dividend, pero wala pa siyang special dividend noong March. Ang SCC hindi pa nakapag-declare ng dividend kasi waiting pa rin sila sa COC bidding. Kaya lang na-delay at na-push ulit sa third quarter ng 2026. So, baka sa October na siya makapag-declare ng dividend. Kaya pwedeng bumaba pa rin ang share price ng DMC at SCC dahil sa uncertainty ng coal contract. That's why many investors are now looking at LTG and other high dividend paying stocks like OGP and RFM to help keep up with the high inflation.

[00:01:19]In this video, we will review LTG's latest financial performance, dividends, and growth prospects to find out if healthy pa rin ba ang business ng LTG whether it remains a good investment today. This is for educational purposes only. Hindi ito financial advice or recommendation to buy this stock. Your investment is your responsibility, so always do your own due diligence before investing. Before I continue, quick shout-out muna sa dalawang bagong YouTube members ko kay Henner Puno and user XE9 NP2. Maraming salamat for supporting my YouTube channel. I really appreciate your support.

[00:02:06]How does the company make money? LTG is one of the largest conglomerates in the Philippines. It generates income from multiple businesses.

[00:02:18]Philippine National Bank banking industry, Philip Morris tobacco industry, Tanduay distillery Asia Brewery in the beverage industry and Eton Properties in real estate. LTG has a market cap of 159 billion pesos.

[00:02:36]In terms of revenue contribution, the biggest contributor is PNB contributing 58.9% of LTG's total revenue. Next is distilled spirits, primarily from Tanduay, contributing 25.7% followed by beverage at 13.4%.

[00:02:57]Property development contributes a small portion at around 2%. PMFTC's revenues are not consolidated into LTG's reported revenue, but instead LTG records its share of PMFTC's profits under equity earnings. So, even though PMFTC does not appear revenue breakdown LTG, it remains one of the largest contributors to LTG's overall profitability.

[00:03:27]Now, let's look at LTG's revenue and earnings history. LTG's revenue has grown significantly over the past 10 years from 51.4 billion pesos in 2015 to 132.4 billion pesos first quarter 2026. In terms of growth, LTG has been growing its earnings at an average annual rate of 9.8% and 9.48% in the month revenue. By the way, most of the data and visuals that I used in this video came from Simply Wall Street.

[00:04:03]I've been using Simply Wall Street for stock analysis, portfolio tracking, monitoring the performance of my portfolio, dividend income tracking, and many more. I am on my ongoing promo until the end of June. You can get a 40% discount on your annual membership if you sign up using my referral link in the description below. Now, let's take a look at LTG's first quarter 2026 financial performance. The first quarter in 2026 LTG generated consolidated revenues of 30.8 billion pesos. So, 1.2% lower than the 31.2 billion pesos reported in the same period last year.

[00:04:49]This was due to lower revenues from the banking and beverage segments. However, this was partially offset by growth in LTG's other businesses. LTG's distilled spirits segment grew by 2.5% year-on-year, while the property development segment delivered 13% revenue growth. Cost of sales and services decreased by 2% for the first quarter of 2026, mainly due to lower net interest expense by banking segment. LTG records its share of PMFTC's profits under equity in net earnings of associates and joint ventures. So, it's slightly lower than the 3 billion pesos recorded in the same period last year.

[00:05:38]The net income of LTG is 10.3 billion pesos, which is 3% higher versus same period last year. Consolidated net income attributable to equity holders of LTG was 7.49 billion pesos, 3.5% higher year-on-year. This was due to improved operating results across major business segments. Next, tingnan naman natin ang segment operations. Sa banking segment, PNB reported net income of 6.37 billion pesos, up 4.5% year-on-year from 6.09 billion pesos in the same period last year. Ang main driver ay stronger core banking operations. Ang kanyang net interest income increased by 5.8% supported by higher loan volumes and lower interest expenses. PNB also generated higher fee income with net service fees and commissions up by 6.1% year-on-year.

[00:06:47]Kaya lang ang kanyang trading and foreign exchange business recorded a 230 million pesos loss during the first quarter due to unfavorable market conditions. But this was offset by higher other income which increased to 1.94 billion pesos driven by gains from real and other properties acquired sales. Operating expenses increased by 2.2% sa first quarter ng 2026 mainly due to higher miscellaneous expenses, depreciation and amortization, and other expenses to support growing business activities and operational demands of the bank. Sa tobacco segment, net income increased by 1.9% year-on-year to 2.86 billion pesos. This was mainly driven by higher dividend income from PMFTC.

[00:07:47]PMFTC due to lower cigarette sales volumes. But you higher dividend income helped offset the weakness and supported overall earnings growth.

[00:08:02]The mass and net income by 8.7% year-on-year. Driven by higher net revenues in the first quarter of 2026.

[00:08:12]This was due to higher selling prices that effectively offset lower sales volume in the liquor business. I'm going to get gross profit margin increased from 16% to 17%.

[00:08:26]Going on to mass and operating expenses due to higher advertising and promotional activities and other expenses. I'm property business and LTG and money it by but it continues to provide LTG with recurring income from rentals and incremental growth from property sales. I'm going to get income near increased by 7% year-on-year to 155 million pesos. To mass per a whole and leasing revenue and real estate sales.

[00:08:58]I'm beverage segment near had the weakest performance during the first quarter of 2026. Net income declined significantly to 98 million pesos. Down 44.9% year-on-year mainly due to lower sales from Cobra energy drinks and the packaging business. At the same time to mass and cost of sales by 3.6% to 3.39 billion pesos due to higher production cost for glass bottles. On a positive note, management was able to reduce operating expenses by 9.5% through lower advertising expenses and lower management and professional fees.

[00:09:43]Napaka healthy ang balance sheet ng LTG.

[00:09:46]Mababa lang ang kanyang utang. Ang debt to equity ratio niya ay 14.47%.

[00:09:53]Return on equity is 11.8%, which is comparable to industry average.

[00:10:00]Napag-usapan naman natin ang dividend history ng LTG. LTG has been giving dividends for 20 years. Quarterly ang dividend payout niya since 2022.

[00:10:12]Dividend yield at the current price of 14.52 is 10.67%.

[00:10:18]And LTG's dividend payments have increased over the past 10 years. Ito naman ang quarterly payout history ng LTG. Ang trend niya is higher dividend tuwing December. Kailan hindi pa siya nag-increase ng dividend since 2022. So, sana nga mag-increase na rin ngayong 2026.

[00:10:38]Dividend payout ratio is 53.72%.

[00:10:42]So, healthy ang kanyang payout ratio.

[00:10:45]LTG doesn't have the typical dividend policy based on payout ratio. Instead, the company states that if retained earnings exceed 100% of its paid-in capital stock, the company is expected to declare dividends unless there is a valid reason to retain the cash. This gives the company flexibility while still supporting shareholder returns through dividends. LTG may not be a high-growth company, pero meron siyang several businesses that could support steady earnings growth and dividends over the long term.

[00:11:24]PNB remains LTG's biggest growth driver.

[00:11:28]LTG is leaning on PNB as its biggest earnings driver with management focusing on prioritizing profitability, discipline, and synergies rather than expansion and diversification.

[00:11:44]LTG management expects continued loan growth sa PNB. Another potential catalyst is the planned PNB Holdings listing as this could eventually unlock value for shareholders. Kailangan na delay ang listing due to uncertain market conditions. Wala pang clear timeline kung kailan ang final listing dates. Another growth driver for LTG is Tanduay. Tanduay still has room to grow.

[00:12:13]According to management, improvements sa supply chain and production efficiency have helped Tanduay achieve record profitability. LTG management believes there is still significant room for volume growth.

[00:12:28]Ang PMFTC naman continues to serve as a cash-generating business through dividends and equity earnings.

[00:12:36]Management continues to focus on reducing illicit cigarette trade, which has long been a challenge for the tobacco industry. LTG noted that anti-smuggling efforts helped lift cigarette volumes in 2025.

[00:12:53]In terms of valuation, LTG is good value based on its price-to-earnings ratio of 5.1 times compared to peers. LTG is also currently trading at a price-to-book ratio of 0.6 times, which means that LTG is trading at a 40% discount to its book value. My calculated intrinsic value is 22 pesos and my buy below price with 30% margin of safety is 15.4 pesos. So, LTG is currently undervalued.

[00:13:29]I continue to view LTG as a solid dividend stock. Hindi siya high growth stock, but it continues to provide value to shareholders through steady earnings growth, regular and attractive dividend payments that can potentially beat inflation. So, how about you? Meron ka bang LTG sa iyong dividend portfolio?

[00:13:50]Thanks for watching and see you in the next video.