With just a handful of matches left in Round 1 of the Motley Fool's ASX World Cup investors are well and truly into the swing of things and will no doubt already have taken sides as they prepare to witness the showdown between two of Australia's greatest global companies – Amcor Limited (ASX: AMC) and Computershare Limited (ASX: CPU).
Here are the stats to review before kick-off:
| Amcor | Computershare | |
| Market Cap | $12.7 billion | $7 billion |
| Revenue (FY13) | $12.4 billion | $2.2 billion |
| NPAT (FY13) | $690 million | $329 million |
| Net Margin | 5.5% | 15% |
| PE (FY14) | 15.6x | 19x |
| Yield (FY14) | 4.1% | 2.5% |
| Net Debt/ Equity (FY13) | 107% | 111% |
Source: Morningstar Research
First Half
Despite competing in completely different industries, Amcor and Computershare still make for an entertaining match-up.
Having demerged its Australian packaging and North American packaging distribution business into Orora Ltd (ASX: ORA), the global packaging giant still boasts a market capitalisation of nearly $13 billion. In its favour Amcor often operates in duopoly-type situations which allows it to earn good returns. Over the past decade it has provided shareholders with a total return (TSR) of 11.1% per annum.
In contrast Computershare has a market capitalisation of $7 billion and like Amcor its business is dominated by large scale players who can leverage their cost base. The lower capital requirements and higher leverage of its fixed cost base allows Computershare to earn a higher profit margin allowing for impressive earnings growth. This has helped the stock achieve a TSR of 17.6% per annum for the last 10 years.
At the first-half siren Computershare has scored 2 GOALS.
Second Half
No doubt Amcor's supporters are nervous as these two teams take the field for the deciding half, however this blue chip stock still has a few tricks up its sleeve.
With a yield of 4.1% and a forecast dividend growth rate into FY 2015 of nearly 8%, Amcor quickly replies with a GOAL against Computershare's 2.5% yield and 12% FY 2015 dividend growth rate.
Turning to valuation and the stocks look neck-and-neck. While neither appears to be a bargain, they also don't look overpriced considering the quality of their earnings and their respective forecast growth rates. Both companies try but neither manages to sneak a goal past the keeper!
Full Time Tally
Amcor and Computershare are high quality businesses, run by capable managers with solid prospects for future growth. With these credentials they certainly deserve a place on investors' watchlists as they progress through the rounds.
On the day however, the appealing business model with lower capital intensity and stronger growth profile has seen the share registry firm Computershare edge out Amcor for a 2 -1 win.
