Cargojet Inc.: A Steady Dividend Machine in a Soaring Air Cargo Market

Investors craving reliable income and growth should fasten their seatbelts—Cargojet Inc. (CJT.TO) is taking off. With a dividend policy as consistent as a well-piloted aircraft, this Canadian air cargo giant is carving out a prime spot in income portfolios. Let's dissect why this stock could be a liftoff for your money.

The Dividend Track Record: No Turbulence in Sight

Cargojet's dividend history reads like a steady climb to higher altitudes. Since 2020, it's raised payouts every year, with quarterly dividends jumping from $0.234 CAD in early 2020 to $0.35 CAD today—a 58% increase over five years. Even better: the dividend payout ratio, which measures how much of earnings go to shareholders, has remained disciplined. In 2024, it sat at 35%, far below the industry median of 40%, meaning the company isn't overreaching. This conservative approach leaves room to weather any headwinds while rewarding investors.

Financial Fortitude: Earnings Are the Fuel

Behind the dividends is a solid earnings engine. After a rocky 2020 (when EPS dipped to -$5.63 CAD due to one-time costs), Cargojet rebounded sharply. By 2022, EPS hit $10.15 CAD, and it's stabilized at $6.68 CAD in 2024—more than enough to cover those rising dividends. With a market cap of CAD 1.47 billion and a stock price near CAD 94.81, this isn't a fly-by-night operation. The company's 41-aircraft fleet and 25 million pounds of weekly cargo handled are the wings keeping it aloft.

Growth Horizon: The Air Cargo Sector Is Taking Off

Income investors often overlook logistics, but air cargo is a gold mine. E-commerce, global supply chain reshuffling, and time-sensitive shipments (pharma, tech parts) are all driving demand. Cargojet's niche—dedicated freighter services—gives it an edge over passenger airlines, which often prioritize belly cargo. With 85% of its revenue from long-term contracts, this isn't a feast-or-famine business.

Risks? Sure, But the Altitude Is Worth It

No investment is risk-free. Cargojet's forward-looking statements cite market volatility and operational challenges. Fuel prices, labor costs, and regulatory shifts could hit margins. But here's the kicker: the company's dividend isn't just consistent—it's predictable. With upcoming earnings releases in August and November 2025, investors can monitor progress. Plus, a 1.48% yield isn't flashy, but paired with dividend growth, it's a solid compounding machine.

Bottom Line: Strap In for Liftoff

Cargojet isn't just a dividend stalwart—it's a growth story masked as income stock. With a payout ratio that leaves room to grow, a resilient earnings model, and a sector in its ascent, this could be one of the best buys for 2025. Income investors: this isn't a cargo hold you want to miss.

Action Item: Buy now. The stock's P/E ratio of ~14.2 is reasonable for a company with this kind of dividend trajectory. Don't wait for the next ex-dividend date—get on board before the next payout soars even higher.