Best International Stock: OMA

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Discover an entire world of compelling investing opportunities in our "Best International Stocks" series.

Ever wonder what it would be like to own a toll booth? The luxury of simply sitting there, collecting revenue as cars pass by, seems almost too good to be true. But investors in airport operator Grupo Aeroportuario del Centro Norte (Nasdaq: OMAB) may disagree. While an airport isn't exactly a toll booth, it's very nearly the next best thing.

Think about the gobs of money airports make every single day of the year, both from airplanes passing through and the travelers those planes carry. Then imagine owning an airport in an area of the world where air travel is just starting to take off. That's why I'm picking the Central North Airport Group, also known as OMA, as the best international stock to own right now.

That's one powerful toll booth
OMA owns a whopping 50-year concession from the Mexican government to operate 13 airports  in the nation's central and northern regions. Nearly 80% of OMA's revenue is generated by charging the airlines that use the airport for services like plane parking, cargo handling, and refueling, all of which are regulated by the Mexican government. This means that OMA can't suddenly decide on a whim to start charging carriers like Continental Airlines (NYSE: CAL), UAL's (Nasdaq: UAUA) United, or Ryanair (Nasdaq: RYAAY) more for using its airports.

But OMA does control fees for things like auto parking, advertising, and leasing commercial space to retail shops, restaurants like McDonald's (NYSE: MCD), travel agencies, and VIP lounges. This gives OMA a plethora of ways to earn revenue directly and indirectly from each and every passenger coming through its airports

Growth is hot! hot! hot!
Countries south of the border have been exploding with growth, and Mexico is no exception. Solid economic gains in the country over the last several years have contributed to substantial increases in personal income. Mexico's GDP per capita is estimated to have reached $12,500 this past year, a 40% rise since the year 2000.

Higher income means citizens can better afford conveniences like air travel, and a number of domestic discount airlines, such as Aladia, Avolar, Interjet, and VivaAerobus, have arisen to meet the demand. In short, air travel in Mexico is now more accessible than ever.

Unlike its more tourist-dependant counterpart Grupo Aeroportuario del Sureste (NYSE: ASR), OMA's portfolio of airports offers a nice mix of domestic and international destinations, targeting both vacationers and business travelers. Monterrey, accounting for 44% of the company's revenue in 2006, is a major industrial and business center boasting Mexico's highest metropolitan GDP per capita. And Mazatlan and Acapulco are prominent international tourist locations. The rest of OMA's airports are regional ports of call within reach of millions of potential travelers.

Show me the money!
How good is OMA's business? Well, the airports are already built, so the business model doesn't require significant capital spending to grow. Costs are mainly fixed, so the incremental revenue from increasing passengers you see below easily falls to the bottom line, consequently expanding margins. The result? Gobs of cash flow.

Passengers (in thousands)

Airport	2003	2004	2005	2006	2007
Acapulco	809	857	920	1,040	1,057
Culiacan	758	773	887	983	1,138
Mazatlan	791	831	906	911	905
Monterrey	3,970	4,584	5,020	5,554	6,560
Zihuatanejo	561	605	613	686	675
Others	2,808	2,942	3,218	3,532	3,878
Total	9,697	10,592	11,564	12,706	14,213
Y-O-Y Growth		9.20%	9.20%	9.90%	11.90%

OMA uses that cash to reward investors with a generous 3.3% dividend, or nearly $0.20 per share each quarter. With the kind of growth and cash flow OMA has ahead of it, this dividend has nowhere to go but up.

Trading more than 25% off their 52-week high, OMA's shares look ripe for purchase. More than 150 of our Motley Fool CAPS community members seem to agree, picking OMA to outperform the S&P 500. Agree? Disagree? Head on over to CAPS today and cast your vote!