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Drikus Combrinck’s interesting stock pick – OMA

Drikus Combrinck

Drikus Combrinck from Capicraft said Grupo Aeroportuario del Centro Norte is a growing asset with an attractive price.

Combrinck is a well-known pundit and topped Daily Investor’s stock picker ranking for the best performance over the last two years.

His latest stock pick – Grupo Aeroportuario del Centro Norte (OMA) – is a Mexican airport operator headquartered in San Pedro in Mexico.

The company operates 13 airports throughout central and northern Mexico, listed below.

Monterrey international airport is the second largest industrial and business centre in Mexico and OMA’s largest airport by monthly traffic.

Acapulco, Mazatlan and Zihuatanejo airports are mostly tourist destinations.

Chihuahua, Chuliacan, Durango, San Luis Potosi, Tampico, Torreon and Zacatecas are airports located in regional areas.

Ciudad Juarez and Reynosa are situated in border locations.

Combrinck said the company is experiencing significant growth. Many South American businesses are returning from the east, and the Monterrey airport is well positioned to be advantaged by this.

Another benefit is that Mexican stocks are typically well-priced, and he said the stock is trading at a discount relative to many other airport owners.

OMA has delivered a slightly positive price return in the current year-to-date, with its share price increasing from $53.35 to $54.79 (2.7%), as seen in the graph below.

OMA share price

OMA is a strong dividend payer with a current dividend yield of 4.42% and an average dividend yield of 4.3% since 2010.

OMA has been able to pay a dividend every year since 2010, with only one exception – 2020.

The group has been able to resume dividend payments, continuing its upward trajectory.

OMA delivered an average dividend pay-out ratio of 0.71, with a current payout ratio of 0.67.

OMA dividends

We compared OMA with two other Mexican airline operators:

  • Grupo Aeroportaurio del Pacifico (PAC) who operates 12 airports.
  • Grupo Aeroportuario del Sureste (ASR) who operates 9 airports.

It shows that OMA has the smallest market share at 19%. PAC and ASR increased their market shares by 2% since 2012, whereas OMA lost 4%.

However, from 2020 to 2021, OMA increased its market share from 18% to 19%.

OMA has grown its August 2022 traffic by 27% compared to August 2021. However, PAC and ASR have also shown aggressive traffic growth, which means OMA may lose market share.

A good sign is that OMA generated a higher net income margin – 32.77% – than PAC and ASR’s 31.54% and 31.85%, respectively.

Looking at the three companies’ price-to-earnings (P/E) ratios show that OMA and ASR are priced similarly. PAC appears to be overvalued relative to its industry peers.

Market share comparison

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