MENU

Kick Off: Amcor Limited v Brambles Limited

The Motley Fool’s ASX World Cup series has been nothing short of outstanding so far, and today’s match between global packaging group Amcor Limited (ASX: AMC) and pooling solutions company Brambles Limited (ASX: BXB) should be no different.

Both teams come into this tournament with a very similar recent performance. So far in 2014, Amcor’s share price has retreated 0.6% while Brambles has gained 0.7%, with both lagging behind the S&P/ASX 200 Index’s (Index: ^AXJO) (ASX: XJO) 1% gain. However, there’s plenty to like about both entities – it looks set to be a close one!

First, let’s take a look at the line-ups:

Amcor Limited Brambles Limited
Code ASX:AMC ASX:BXB
Recent Price $10.46 $9.24
Market Capitalisation $12.6 billion $14.4 billion
Dividend Yield | Franking 3.8% | 0% 2.9% | 30%
Projected P/E ratio 15.7 22

(Source: Morningstar)

Amcor Limited

Amcor has been a long-time crowd favourite, having risen 180% since March 2009. While it let one of its key players in Orora Limited (ASX: ORA) go late last year, it seems to have been the right decision with the company now able to focus on its operations in emerging economies offering greater growth potential. In fact, the company has grown at a compound rate of 18% annually over the last 13 years in these regions. That’s an outstanding early goal for Amcor.

The team looks set to benefit as the global economic outlook improves and if the Australian dollar falls versus the US greenback. Better yet, it is trading on a lower P/E ratio than its rival in Brambles and offers a higher dividend yield (albeit unfranked), scoring them another late goal.

Brambles Limited

Like Amcor, Brambles has been a fantastic stock to hold with its price up 128% since March 2009 and, with expanding operations through Europe, the team should continue to go from strength to strength. In April it forecast 7% growth on a constant currency basis for its third quarter which could well be boosted by acquisitions of businesses like Transpac, which it also recently announced.

Brambles is an excellent team. Indeed, with a market capitalisation of $14.4 billion, it is also one of Australia’s largest. However, it appears the crowd has already well-and-truly recognised its talent with the stock currently trading on a much higher P/E ratio than Amcor (as well as a lesser dividend yield).

Full-time

There is no questioning the quality of either team but this time around, Amcor managed to get away with a 2-0 win in what was an excellent start to this tournament. Based on its sheer size, impressive history and growth potential Amcor could certainly be a stock to watch for the remainder of this tournament…

One stock I think could easily overpower Amcor in the arena has recently been dubbed "The Motley Fool's #1 dividend stock for 2014". It boasts a far greater fully franked dividend yield and has enormous growth potential. Better yet, it's yours absolutely free! Simply click here for your FREE copy right now!

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.