Sydney Airport Holdings Pty Ltd (ASX: SYD) shares may be moving today after releasing airport traffic data for September. Here’s what you need to know.
About Sydney Airport
Sydney Airport Holdings is the company that operates the Kingsford Smith Airport. It currently has a 99-year lease on the airport that will revert back to government ownership at the end of this century. According to Sydney Airport, it generates $30.8 billion in economic activity a year, which is equivalent to 6.4% of the NSW economy.
September Traffic Numbers
Sydney Airport reported positive traffic numbers for September 2019, with domestic traffic up 1.2% compared to September 2018 and international traffic up 1.9%.
Year-to-date, domestic traffic remains 1.1% lower than this time last year, although that figure was 1.3% in August. International traffic is now up 1.4% year-to-date and total traffic is down 0.1% versus January to September 2018.
Sydney Airport CEO Geoff Culbert said, “Our international passenger performance in September is a continuation of the growth we saw in August”.
International traffic growth is being driven largely by Asia, with traffic from India up 11.2% compared to September 2018, and Indonesian traffic up 16.1%. Traffic from China, New Zealand and the US has also seen strong growth, up 5%, 4.8% and 7.7% respectively.
Is SYD A Buy?
Sydney Airport has had a year of relatively weak traffic growth, but it seems like numbers are starting to pick up, particularly international traffic. While international traffic growth has been reasonable, domestic traffic continues to drag on performance and it’s the reason year-to-date numbers are still down from this time last year.
I like Sydney Airport shares and the yield on offer (around 4.5%) is appealing, but I’d be thinking twice about the current valuation in comparison to the growth that’s actually being reported.
I think the dividend-paying companies in the free report below might be better options.
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Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.