3 reasons to pack your portfolio with Amcor Limited

Since Amcor Limited (ASX: AMC) demerged its fiber and beverage packaging business into Orora Ltd (ASX: ORA) in December last year, it has had a very muted share price gain of just 2%. In comparison it’s been a fantastic time for Orora with its share price rallying 20%.

With Orora’s performance far outstripping both Amcor’s and the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) the easy gains may have already been had for Orora’s shares, however it could be time for investors to take a closer look at Amcor. Here are three reasons why investors should.

  1. Stock broker Citi has a ‘buy’ recommendation on Amcor and it’s not the only broker looking favourably upon the stock which is trading on a FY2015 forecast PE of 16.2.
  2. While Orora houses much of the slower growing ‘old-Amcor’ Australian and North American operations, Amcor earns less than 5% of its sales revenue from Australia and is much more highly skewed towards growth.
  3. Dividends. Amcor is forecast to increase its dividends in the coming years and based on consensus data for FY 2015 the stock has a yield of 4.4%.

With Pact Group Holdings Ltd (ASX: PGH) also recently listing, investors now have a handy peer group of packaging industry companies to compare against, and to provide relative valuations. The underlying defensive nature of all three companies is appealing, particularly for investors seeking steady and maintainable dividends.

Discover our top dividend stock for 2014-2015

A high dividend is not much use if it can't be maintained! Every year, Motley Fool investment advisor Scott Phillips hand-picks 1 ASX dividend stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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.