Mexican Airport Stocks Are Back to All-Time Highs. They Are Still Cheap (OMAB, PAC)

Q1 update and forward outlook

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We talked a lot of big tech on this week’s podcast (links above). While I enjoy talking about the hottest names at the moment, the attention for my personal portfolio is elsewhere. Opportunities in US large caps are limited at the moment.

Specifically, we got an update from the Mexican airport stocks this week.

My investments are in Grupo Pacifico and Grupo Norte (sorry Grupo Sureste, nothing personal). The US tickers are PAC and OMAB. Combined, these stocks are over 10% of my savings, and I wouldn’t be surprised if they were eventually 15% of the portfolio.

At ~$400 for PAC and ~$215 for OMAB, shares of the Mexican listings for these stocks are near all-time highs again.

The Q1 earnings updates indicate these stocks are still cheap, especially OMAB.

Here are the side-by-side key figures for each company.

Passenger traffic:

• 4.2% growth at Grupo Pacifico

• 9.1% growth at Grupo Norte

Traffic declined for international passengers visiting Cabo, Puerto Vallarta, and Montego Bay for Grupo Pacifico. Tourist figures are looking weak, which Grupo Norte is less exposed to.

Revenue growth (in Pesos, excluding construction sales):

• 26.1% growth at Grupo Pacifico

• 15.6% growth at Grupo Norte

Two things to note. First, revenue growth is outpacing traffic growth for both companies. Second, Grupo Pacifico’s revenue is growing faster than Grupo Norte, even though the latter is experiencing faster traffic growth.

Grupo Pacifico signed its new five year contract with Mexico that is now being implemented. Grupo Norte’s contract will be signed later this year.

I believe this bodes well for revenue growth in 2026 (and beyond) for Grupo Norte, as it is unlikely the deal will be vastly different than the one granted to Grupo Pacifico. We have a lot of inflation to make up for in the last five years.

Operating margin:

• 56.4% operating margin at OMAB over the last twelve months, close to an all-time high

• 53.5% operating margin at PAC over last twelve months, trending downward in recent years

Operating margin can be misleading due to spending on concessioned assets that have zero margin. However, as we can see from the table below, employee costs, maintenance, and concession taxes are all growing faster than aeronautical revenues at Grupo Pacifico.

Maybe a concern with this new contract? Perhaps a bit, but I still think earnings grow due to traffic tailwinds + increasing revenue per passenger.

Commercial revenue per passenger grew 12.5% year-over-year for Grupo Norte last quarter. Not bad. And should continue as Monterrey becomes a bigger and bigger hub.

More information from my full stock breakdown on Grupo Norte:

All this to say, both stocks remain cheap.

Grupo Pacifico generated 15.7 billion Pesos in LTM operating income, or a 15x multiple vs. the current enterprise value. Earnings can grow at a double-digit rate over the long-term, a 2025 slowdown in tourist traffic not withstanding.

Grupo Norte is much cheaper. It generated 8.4 billion Pesos in LTM operating income, or an 11x multiple vs. the current enterprise value. And, Norte is still waiting for the earnings inflection that will (hopefully) come with the new contract from the Mexican government.

Both stocks will do well over the long-term, but there is a reason Grupo Norte a larger position for me. It is at or near the top of my list for stocks to add to in 2025.

Happy Berkshire weekend to all who are attending and RIP to the Buff Dog as CEO! Legendary run that will not be topped.

-Brett