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Grupo Aeroportuario del Pacífico (PAC) has postponed its annual meeting until April 28. The company’s stock buyback plan and dividend payouts on the agenda.

It’s hard to imagine that the company hasn’t at least considered cutting its buyback and dividends. Grupo Aeroportuario operates 12 airports throughout Mexico’s Pacific region, including the major cities of Guadalajara and Tijuana, the four tourist destinations of Puerto Vallarta, Los Cabos, La Paz and Manzanillo, and six other mid-sized cities. It also operates the concessions at Jamica’s Norman Manley International Airport.

And the coronavirus pandemic that has knocked the stuffing out of airline passenger traffic means fewer consumers strolling airport corridors. Grupo Aeroportuario had said that terminal traffic at its airports was down 5% in the first half of March and I’d guess that’s not the end of the drop. It is quite an abrupt downturn from the 17% increase in terminal traffic the company reported for February.

The good news for the company is that it’s balance sheet is in decent shape. The company has $440 million in cash of which 65% is in dollars or dollar denominated securities. It does not have any debt maturities for the remainder of the year and forecasts that it will be able to meet all financial and operating obligations out of current cash.

So cut the dividend or not? The market sort of says, Yes. The yield has climbed to 7.77% as the share price has dropped. The New York traded ADRs are down 53.08% for 2020 to date. That pretty much tracks the 53.64% drop in the airline and airline service sector for the year.

But in this market a 7.77% yield isn’t all that big a vote for a certain dividend cut. I think cut/no cut is still uncertain.

This is an ADR that I would rebuy for this portfolio after the coronavirus pandemic is receded and airline traffic has started to pick up. It is essentially one of a few government-created monopolies that manage Mexico’s airports.

But I don’t know how long that will take. And I have to say that a dividend cut/no cut is essentially a coin toss. The ADR would certainly drop on a dividend cut.

That’s not my favorite investment model so I’m going to take my punishment here and sell the ADRs. I have a 49.36% loss on this position since I added it to my Divided Portfolio on June 6, 2019. The position had produced dividends of $4.29 an ADR in that period.