Keppel Philippines declares massive 216% dividend

Keppel Philippines [KEP 10.50, up 50.0%; 30% avgVol] [link] declared a dividend of P15.14/share, payable on May 22 to shareholders of record on April 29. This dividend has a yield of 216% based on KEP’s pre-declaration share price of P7.00/share. The dividend was made out of unrestricted retained earnings as of March 31, 2024, which included the P6.52 billion KEP was paid by BDO [BDO 147.30, down 1.9%; 129% avgVol] for its interest in the holding company of the Podium Complex in Ortigas Center. KEP is ultimately a subsidiary of the Singapore-based Keppel Group.

MB bottom-line: It’s not every day that a dividend is more than twice the current share price, but that’s the sort of inelegant thing that can happen when the mothership plots a dramatic change of course. The Podium sale was part of the Keppel Group’s long-term “Vision 2030” plan to “simplify and focus” its business to focus on future growth opportunities. A quick Google search of “Keppel divestment” will show many results of the Keppel Group performing similar transactions across a host of minor subsidiaries in Myanmar, China, Thailand,  Malaysia, and Australia. This dividend is likely part of that capital transfer. The promise of such a quick windfall dividend was guaranteed to smash KEP’s price into yesterday’s ceiling, and that’s exactly what happened. KEP’s share price was up 50% on the first trade to P10.50. Today’s ceiling price would be P15.75, and buying at that price would still give May’s dividend a yield of 9.6%. Congratulations to all of the KEP bagholders that have held on to this sleepy stock for so long! Hey, I wonder why Keppel Philippines Holdings [KPH 12.90, up 50.0%; 548% avgVol] is getting so much attention now? Speculators, mount up!

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