Airline stocks aren't known for earnings stability.
Many airlines listed in the
stock market today
can't stay in the black long enough to have a five-year EPS
Stability Factor. Of the 10 stocks in the airline group that have
a rating, the average score is 49.
The gauge runs from 0 (calm) to 99 (wild).
Copa Holdings (
) is the exception. The stock has a five-year Earnings Stability
Factor of 6 -- best in the group. The five-year EPS growth rate
is 20%. The five-year revenue growth rate is 15%.
The airline provides passenger and cargo service to 29
countries, mostly in Latin America and the Caribbean. There were
83 planes in Copa's fleet as of December. The average age of the
fleet is 4.3 years, and that number will likely drop when more
Boeing 737-800 plane orders are delivered in 2014.
Latin America is not as mature of a market as North America.
Copa has opportunities to grow. The company expects to continue
adding flights and destinations.
Earnings growth has been slow in recent quarters -- 3%, 8% and
4%. However, analysts expect it to pick up this year. They
estimate 2013 EPS will rise 26%. The Street expects sales to grow
The dividend policy is unusual. Copa pays a dividend once a
year. The payout has been increased in six of the past seven
years; in 2009 it was unchanged.
Usually the dividend is paid in June, but Copa moved the June
2013 payout to December to let shareholders avoid a potential tax
increase. The December payout was $2.25 a share, providing a
current annual yield of 2.12%.
Unless something changes,
buying now won't get a dividend payout this year.
One risk is that almost six of every 10 Copa workers are in