Daily Tribune‘At such price, the stock is undervalued; at P3 a share, the market is valuing RFM at only 10 times the price-earnings ratio. RFM has a good sales and income growth track record over the years and our portfolio of brands like Selecta Ice Cream, Selecta Milk, Royal Pasta and Fiesta Pasta are significant market leaders in their own categories.’
Listed food and beverage company RFM Corporation CEO Jose Ma. A. Concepcion III announced that he bought 15 million shares of RFM shares today, through his personal holding company, at a price of P3.00 per share.
Concepcion said that at such a price, the stock is undervalued.
"At P3 a share, the market is valuing RFM at only 10 times the price-earnings ratio. RFM has a good sales and income growth track record over the years and our portfolio of brands like Selecta Ice Cream, Selecta Milk, Royal Pasta and Fiesta Pasta are significant market leaders in their own categories," according to Concepcion.
"RFM continues to invest in future growth with a new factory site in Cavite and new production lines in Laguna. We have a very strong balance sheet: no bank loans at the parent company level and more than adequate liquidity. In fact, RFM has bought back about 132 million shares through our share buyback program and at P3 per share, the estimated dividend yield is 7 percent," the CEO said.
Preliminary unaudited sales
Last January 2023, Concepcion said the preliminary unaudited 2022 sales expanded 15 percent to P19 billion on the back of both volume and price increases in RFM's ice cream, milk and institutional segments.
Preliminary unaudited net income for 2022 hit P1.06 billion from P1.3 billion in 2021 as margins compressed due to higher input costs, such as wheat, milk and sugar which RFM absorbed partly, as well as the bigger charge of electricity by RFM's power supplier.
The listed food and beverage company also disclosed that its Board of Directors has approved a cash dividend of P350 million or P0.103871 per share payable on 14 February 2023 with a record date as of 19 January 2023.
The P350-million cash dividend is 33 percent of the 2022 unaudited net income and is one of the dividend declarations made every year by the company with a usual total cash payout of 60 percent of net income.
At the end 2022 share price of P3.60 per share, the yield of the P350-million dividend is three percent.
