Mexico economic data clearly indicates a nation verging on, if not already in, recession. Global international air passenger traffic and freight reports suggest a worldwide economy in a much slower growth phase, than at any point in the last 5 years. To add domestic insult to global injury, Mexico is presently led by a populist leftist with what appears to be a tenuous grasp, at best, of how to successfully operate a capitalist economy.
Despite all of these headwinds, passenger traffic at the airports operated by PAC continue to demonstrate a growth rate roughly 7% higher in the current fiscal year. Such a growth rate, when coupled with a 2019 dividend rate well above 4%, taking into account EBITDA margins on revenues well above 60%, might lead some to look at the business of PAC with an interested eye, should one be looking at an investment that offers the potential for dividend increases over time. If a global economic slowdown and a domestic recession can only reduce passenger growth rates to 7%, it would appear that a secular trend for travel to Mexico remains intact. What would an economic rebound, over the longer term, do for PAC top and bottom lines, once the Mexican recession ends?