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Kick Off: Macquarie Group Ltd v Amcor Limited

Welcome to this ASX World Cup group game between Macquarie Group Ltd (ASX: MQG) and Amcor Limited (ASX: AMC). With other group members Computershare Limited (ASX: CPU) and Brambles Limited (ASX: BXB) representing two of the best investments available among the S&P/ASX 200 Index (INDEXASX:XJO), this is a very strong group.

Pre-match commentary and stats

Over the past year Macquarie has been enjoying the rise of global equity markets and the low interest rate environment, with its own shares up more than 36%. Packaging-giant Amcor has returned just over 3% as its defensive business model leads to steadier performance.

 

Macquarie

Amcor

Code

ASX:MQG

ASX:AMC

Recent Price

$60.22

$10.45

Market Capitalisation

$19.21 billion

$12.43 billion

Dividend Yield / Franking

4.7% | 100%

3.9% | 0%

Projected P/E ratio 2015

14.4

15.9

Price-Book ratio

1.68

3.76

Source: Morningstar / Thomson Consensus Estimates.

The game kicks off and Macquarie goes on the attack, players and fans are pointing to its innovative tactics and eye on the future. In the last financial year it disposed of its holdings in Sydney Airport Holdings Ltd (ASX: SYD) and Ozforex Group Ltd (ASX: OFX), allowing it to put capital to work in new ventures. That’s some silky skills from the bankers to skip past Amcor’s defence and score! 1-0 to Macquarie.

Going into the second half it looks like the crowd are favouring the steady earnings streams of Amcor over the more unpredictable Macquarie. Amcor trades on a forward price-earnings of 15.9 to Mac Bank’s 14.4, however, value-oriented investors may prefer the higher risk Macquarie and it scores another. 2-0 to Macquarie!

Amcor has big growth opportunities in emerging markets, with around 30% of revenues coming from them, but Macquarie is focusing on the Australian home loan market! That’s a move out of the left-field from the investment bank, even teaming up with Qantas Airways Limited (ASX: QAN) to promote its offerings. That’s a fine one-two and with the Australian mortgage market being a potential game-changer for Mac Bank it scores a third. Amcor’s a fine business, but couldn’t compete with Macquarie’s growth outlook. Full time score is 3-0 to the bankers.

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Motley Fool contributor Tom Richardson owns shares in Macquarie and Sydney Airport. The Motley Fool owns shares in Computershare and Ozforex. You can find Tom on Twitter @tommyr345

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