Amcor PLC's Dividend Analysis
Understanding Amcor PLC's Dividend Performance and Prospects
Amcor PLC (NYSE:AMCR) recently announced a dividend of $0.13 per share, payable on 2024-03-19, with the ex-dividend date set for 2024-02-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Amcor PLC's dividend performance and assess its sustainability.
What Does Amcor PLC Do?
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Amcor is a global manufacturer of flexible and rigid plastic packaging and provides packaging solutions to the food, beverage, pharmaceuticals, medical, household, personal care, and industrials sectors. Operations span more than 40 countries and over 200 locations. Around half of group sales are derived from North America, one quarter from Europe, and the remainder from emerging markets. Amcor operates two distinct businesses: flexibles and rigids. Flexibles accounts for about 80% of earnings and produces plastic, aluminium, and fibre-based packaging. Rigids accounts for about 20% of earnings and consists primarily of hot-fill and cold-fill polyethylene terephthalate bottling solutions in the North American and Latin American markets.
A Glimpse at Amcor PLC's Dividend History
Amcor PLC has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Amcor PLC's Dividend Yield and Growth
As of today, Amcor PLC currently has a 12-month trailing dividend yield of 5.31% and a 12-month forward dividend yield of 5.39%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Amcor PLC's annual dividend growth rate was 1.60%. Based on Amcor PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Amcor PLC stock as of today is approximately 5.31%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Amcor PLC's dividend payout ratio is 0.87, which may suggest that the company's dividend could be at risk.
Amcor PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Amcor PLC's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Amcor PLC's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Amcor PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Amcor PLC's revenue has increased by approximately 8.60% per year on average, a rate that outperforms approximately 58.36% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Amcor PLC's earnings increased by approximately 18.30% per year on average, a rate that outperforms approximately 64.65% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 9.70%, which outperforms approximately 57.34% of global competitors.
Concluding Thoughts on Amcor PLC's Dividend Outlook
In conclusion, Amcor PLC's consistent dividend payments, moderate dividend growth rate, and a reasonable payout ratio paired with strong profitability and growth metrics, paint a picture of a company that is attentive to shareholder returns while also investing in its future. However, investors should remain vigilant and monitor the payout ratio and profitability closely, as these are key indicators of a dividend's sustainability. With these factors in mind, value investors may find Amcor PLC an interesting prospect for their portfolios. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
