Amcor PLC's Dividend Analysis
Understanding Amcor PLC's Dividend Sustainability and Growth
Amcor PLC (NYSE:AMCR) recently announced a dividend of $0.13 per share, payable on 2023-12-12, with the ex-dividend date set for 2023-11-21. 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, with dividends 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 5.23% and a 12-month forward dividend yield of 5.34%, suggesting 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 5.23%.
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. As of 2023-09-30, Amcor PLC's dividend payout ratio is 0.75, which may suggest that the company's dividend could be at risk of being unsustainable. However, Amcor PLC's profitability rank of 7 out of 10, as of 2023-09-30, suggests 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
For dividends to be sustainable, a company must demonstrate 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 and 3-year revenue growth rate indicate a strong revenue model, with revenue increasing by approximately 8.60% per year on average, outperforming approximately 55.46% of global competitors. The company's 3-year EPS growth rate and 5-year EBITDA growth rate of 9.70% also outperform a significant portion of global competitors.
Next Steps
Considering Amcor PLC's consistent dividend payments, modest dividend growth rate, manageable payout ratio, robust profitability, and solid growth metrics, the company appears to be in a strong position to maintain its dividend payouts. Investors should, however, monitor these factors closely, as any significant changes could impact future dividends. For those seeking high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener for potential investments.
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.
