02. Copa Holdings, S.A. (NYSE:CPA)
Dividend Yield: 6.11%
Payout Ratio: 43.60%
Copa Holdings, S.A. (NYSE:CPA), the leading airline out of Panama, is a hidden gem for income focused investors eyeing strong fundamentals and consistent performance. With a dividend yield of 6.11% and a payout ratio of just 43.6%, Copa is returning serious value to shareholders without compromising its growth trajectory. Even better, it trades at a compelling forward P/E of 5.76, boasts a debt to equity ratio of 0.78, and carries a PEG ratio of 0.61, signaling that growth is still very much on the table.
In Q1 2025, Copa Holdings, S.A. (NYSE:CPA) delivered a robust performance, highlighted by an operating margin of 23.8%, one of the highest in the global airline industry. Despite some pressure on passenger yields, Copa’s cost discipline and operational excellence helped maintain profitability. Revenue may have felt slight headwinds due to currency fluctuations and regional capacity increases, but Copa managed to grow passenger traffic by 10.1% and keep load factors at a strong 86.4%.
On the cost side, Copa continues to shine. Unit costs excluding fuel (CASM ex) dropped by 4.3% year over year, thanks to efficiencies in sales, staffing, and servicing. Their on time performance of 90.8% and an exceptional completion factor of 99.9% keep customer satisfaction and efficiency high, critical in a competitive market.
Financially, Copa is in excellent shape. The airline ended the quarter with over $1.3 billion in cash, representing 39% of trailing 12 month revenue, and a net debt to EBITDA ratio of just 0.5x. Its average debt cost sits at a manageable 3.5%, most of which is fixed. With a strong balance sheet and over $600 million in pre delivery aircraft deposits, Copa is well positioned for future expansion.
Looking ahead, Copa Holdings, S.A. (NYSE:CPA) is raising its 2025 operating margin forecast to 21–23%, citing lower fuel prices and stable demand. With plans to expand its fleet to 125 aircraft by year end, and new routes across the Americas, Copa continues to solidify its dominance.
In short, Copa offers a rare blend of growth, yield, and financial resilience, making it a standout dividend stock that could soar even higher in 2025.