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.
- 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.
- 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.
- 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.
