GMA7 Faces Dividend Cut Risk Amid Economic Slowdown; Shares Could Re-rate Lower

GMA Network Inc. (PSE: GMA7) may be forced to trim its cash dividend as the Philippine economy shows signs of slowing, putting pressure on advertising revenues—the company’s primary income source.

The network’s strong performance in 2025 was fueled by election-related advertising, which drove a 12% revenue increase to ₱13.99 billion for the first nine months, according to its latest SEC filing. Advertising accounted for more than 90% of total revenues, with political advocacies and campaign ads ahead of the May midterm elections providing a significant boost.

GMA declared a ₱0.50 per share dividend in March 2025, totaling ₱2.43 billion, following ₱0.60 in 2024 and ₱1.10 in 2023. This payout represented an aggressive 88% of annualized earnings, based on its nine-month net income of ₱2.07 billion. Analysts estimate that a 2% GDP slowdown could cut profits by up to 24%, pushing payout ratios above 100% if the dividend remains unchanged.

To maintain financial prudence, a reduced dividend of ₱0.35–₱0.40 per share appears more sustainable. At the current share price of ₱5.30, GMA7 offers a yield near 9.4%. If the dividend drops to ₱0.35, the stock could re-rate to ₱3.70 at the same yield, or ₱4.30 at ₱0.40—implying a potential 20–30% downside.

Despite strong liquidity (current ratio 2.08) and leadership in TV ratings, GMA faces a delicate balance between shareholder returns and operational resilience as advertising budgets tighten.

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