Metro Pacific Investments Corporation (PSE:MPI) recorded a 10.4% increase in earnings attributable to parent company for the first nine months of 2012 to P4.99 billion. The increase is mainly due to higher profits from Manila Electric Company (PSE:MER), higher billed volumes in Maynilad Water Services, (PSE:MWC) and additional investments in the healthcare segment.
We like MPI's growth potential because of its investment focus on basic consumer needs. The main source of its revenues come from Meralco, accounting for 65% of its 2012 income. Its healthcare business, meanwhile, is aggresively gaining ground as MPI continue to add more hospitals to their portfolio. Their core net income from healthcare business rose by 31% consisting of six full service hospitals.
The company is also expected to be a major bidder on the government initiative for a Public Private Partnership given its holdings on infrastructure and its strong financial capability. It even entered into joint venture agreement with Ayala Corporation (PSE:AC) to bid with the MRT extension project. Income from its water holdings in Maynilad can still drive significant growth coming from about 1.5 million people not yet being served in concession areas.
MPI shares closed at 4.27 last Friday, up 3.14% from the previous week. Its PE ratio of 18.98 is a bit high but its well rounded and divested holdings justify the cost as the benefits of investing on it for the long term can foreseeably be rewarding.
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Disclaimer: This article is solely the opinion of the blogger based on personal research. Any statement made is not a conclusion of absolute fact and is not intended to impose or persuade anyone's judgement.