Bulletproof Income: A Top TSX Stock to Hold for Life

Cargojet (TSX:CJT) has built a reputation as the backbone of Canadian air cargo. A position it has held through economic cycles, global disruptions, and shifting trade patterns. For investors seeking bulletproof income and long-term stability, the TSX stock’s recent results offer a case study in resilience.

What happened?

Let’s first look at the last quarter. Even with softer demand in certain international routes, Cargojet’s domestic and charter operations have powered growth, delivering a 3.2% year-over-year revenue increase to $238.2 million in the second quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to $80.2 million. Meanwhile, adjusted earnings per share (EPS) more than doubled from the prior year to $1.02. This performance is backed by operational excellence, with a record on-time arrival rate of 99.5%.

The past year has been a balancing act between managing costs and seizing growth opportunities. Domestic revenues climbed 14% in the quarter, complemented by a 22% surge in charter operations. That strength more than offset the weakness in ACMI flying from Europe, which was hit by slower traffic.

However, management expects that dynamic to shift with the European Union and U.S. trade deal now in place, creating potential for new transatlantic opportunities. Importantly, Cargojet’s focus on efficiency paid off. Adjusted EBITDA margins improved sequentially despite flying 10% fewer block hours compared to last year. This shows the TSX stock’s ability to make more from less, an important quality when navigating economic uncertainty.

Long-term growth

Over the last 12 months, Cargojet also strengthened its financial foundation. While free cash flow took a hit in the quarter due to heavy capital expenditures, the investments are designed to support long-term growth. The TSX stock continues to run a lean operation, keeping debt manageable for a capital-intensive business and maintaining a payout ratio of just over 15%. That low payout gives its dividend more room to breathe compared to peers that distribute a larger slice of earnings, making it more durable in downturns. For income investors, this approach signals that the dividend isn’t just safe, it’s built to last.

The stock hasn’t been immune to market volatility, falling from last year’s highs as concerns over global trade and freight demand weighed on sentiment. Yet, for those with a long-term view, this pullback could be a gift. Cargojet’s role is in time-sensitive freight from e-commerce orders to critical medical supplies. This makes it indispensable. As global supply chains evolve, demand for fast, reliable air freight isn’t going away. In fact, the continued growth of online retail and just-in-time delivery models could keep Cargojet’s planes busy for decades.

There are risks to consider. Economic slowdowns can weigh on discretionary shipping volumes, and fuel prices remain a key cost factor. The TSX stock’s international exposure, while a growth driver, can also be vulnerable to geopolitical shocks. Still, its proven ability to pivot has been a constant in its playbook, shifting focus to domestic and charter work when other segments soften.

Bottom line

For investors looking to lock in a high-quality income stock they can hold for life, Cargojet offers a compelling mix of stability, growth potential, and operational discipline. It weathered industry downturns before and emerged stronger, and its current trajectory suggests it could continue delivering dependable returns for years to come. And right now, you get a deal with a $7,000 investment bringing in an annual income of about $94!

With a dividend that’s well-covered, a strategic growth plan in motion, and a core service that will always be in demand, Cargojet remains one of the TSX’s most enduring income plays.