We came across a bullish thesis on Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) on Substack by Chit Chat Stocks. In this article, we will summarize the bulls’ thesis on OMAB. Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB)’s share was trading at $77.23 as of Feb 28th. OMAB’s trailing and forward P/E were 15.48 and 15.17 respectively according to Yahoo Finance.
Grupo Aeroportuario del Centro Norte (OMAB) delivered solid Q4 2024 results, reinforcing its position as one of Mexico’s highest-quality stocks. Passenger traffic, the key driver of OMAB’s financial performance, grew 4.6% year-over-year to 7.1 million, reflecting an acceleration as new routes opened following the resolution of Pratt & Whitney engine issues. This traffic increase translated into an 11.1% rise in aeronautical revenue, while commercial revenue outpaced both, surging 21.7%. Historically, OMAB’s revenue growth has slightly exceeded traffic expansion, a trend that is expected to continue.
The company is currently negotiating a new Master Development Plan (MDP) with the Mexican government, set to take effect in 2026. This MDP is likely to result in a step-change in the fees OMAB can charge airlines, unlocking significant revenue growth. Monterrey Airport, OMAB’s crown jewel, handled 13.5 million passengers in 2024—roughly half of the company’s total traffic. Expansion efforts are ongoing, with the second phase of the Monterrey Airport expansion expected to push capacity to 16 million passengers by 2026. Management is positioning Monterrey as Northern Mexico’s primary hub, benefiting from increasing connectivity as traffic to Mexico City remains constrained. New routes established in late 2024 still need time to mature, supporting continued traffic growth in 2025.
Despite 2024 being a relatively weak year for traffic, OMAB generated 8 billion Pesos in operating income. With a market cap of 73 billion Pesos and net debt of 10 billion, the stock trades at just 10x trailing earnings, offering a compelling 10% earnings yield. This could rise to 15% by 2026 as revenue accelerates. OMAB prioritizes shareholder returns through dividends, meaning investors could recoup a significant portion of the market cap in cash within five years. Traffic surged 10% year-over-year in January, suggesting an inflection point. The stock remains an attractive long-term opportunity.
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held OMAB at the end of the fourth quarter which was 9 in the previous quarter. While we acknowledge the risk and potential of OMAB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than OMAB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.