Megawide raises dividend ceiling to 50%

Megawide Construction Corp. has raised its dividend allocation ceiling to 50 percent of its net income the previous year amid expectations of its profit tripling by 2027.

The company led by tycoon Edgar Saavedra on Monday said in a disclosure that its board of directors had increased the maximum allowable dividend cash declaration policy from 30 percent.

This means Megawide can pay out up to 50 percent of its earnings as cash dividends to its shareholders.

Traders reacted positively to the news, with Megawide’s share price surging by 8.28 percent to close at P3.40 each.

Its share price has so far ballooned by 43.5 percent from P2.37 a week ago.

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said that Megawide had “bright financial prospects.” This means that the firm could have capacity “to distribute more profits to shareholders.”

In changing its dividend policy, Megawide is also giving a signal that it may issue more preferred shares in the future, Colet added.

“[This] means they need additional leeway to cover the cash dividends for those, and, second, they will probably regularly declare cash dividends for common shareholders,” he said.

Holders of preferred shares are prioritized during dividend payouts, although they are not given voting rights. But while common shareholders do have voting rights, dividend payouts are not always guaranteed for them.

First Metro Securities Brokerage Corp. and DBS recently released a report saying Megawide’s profit may triple by 2027.

This projection is driven by robust prospects for Megawide’s construction, land port and real estate businesses.

The government’s aggressive anti-corruption drive is likewise seen to favor large contractors like Megawide, whose major infrastructure projects include public-private partnerships.

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In 2024, the company’s net income doubled to P538 million as the construction business remained its key growth driver.

At the same time, its new property unit, PH1 World Developers Inc., also delivered strong earnings.

Construction revenues grew by 16 percent to P21 billion. PH1’s top line ballooned more than four times to P711 million.

In the first semester of 2025, Megawide’s net income reached P436 million.

Saavedra earlier noted their foray into the government’s Pambansang Pabahay Para sa Pilipino Program was expected to address the six million housing backlog in the country and “further harness synergies within the group.”