The ASX dividend stock Amcor CDI (ASX: AMC) has seen its share price fall significantly – it's down 25% in the last year. That's a big drop for one of the ASX's largest businesses.
Amcor is not a very public-facing business, but it does have an important role in the global economy. The company says it's a global leader in packaging solutions for consumer and healthcare products. It offers flexible packaging and rigid packaging. If you walk around a supermarket or pharmacy, a fair number of those products with plastic packaging will have used Amcor. Amcor recently acquired Berry Global, further expanding its global presence.
Strong dividend credentials
Amcor has a track record for increasing its annual dividend regularly over the last 15 years.
In FY25 the ASX dividend stock delivered shareholders another dividend increase. The company increased its annual dividend to US 51 cents.
At the current Amcor share price, the FY25 payout represents a dividend yield of approximately 6.25%. While that's not the biggest yield on the ASX, I'd say it's attractive for a business that's industrial and defensive.
Plus, if the dividend payout continues to grow in the coming years, then the dividend yield on offer could become even more attractive for income-focused investors.
Let's take a look at what's expected with the company's guidance.
Growth expected in FY26
In FY25, the business delivered adjusted earnings per share (EPS) of US 71.2 cents, up 3% excluding currency impacts.
The ASX dividend stock is expecting to deliver adjusted EPS of between US 80 cents to US 83 cents in FY26, representing constant currency growth of between 12% to 17%.
Amcor is also expecting the free cash flow to come between US$1.8 billion to $1.9 billion, which would represent an approximate doubling, year-over-year.
Management remain bullish on the prospects for the business following the acquisition of Berry Global. The Amcor CEO Peter Konieczny said:
Feedback from our customers has been positive and has already resulted in business wins directly linked to this combination. Integration efforts began on Day 1 and I am proud of the excellent progress our teams have made. We are tracking well against our synergy targets and our delivery run rate is building as expected. In addition, through our strategic portfolio review, we have identified Amcor's $20 billion core portfolio of consumer packaging and dispensing solutions for nutrition and health along with optimization actions designed to further sharpen our focus on attractive categories and drive faster growth.
Our efforts share one common objective: to create an even stronger business, that is the global packaging partner of choice for our customers, and delivers higher levels of consistent organic growth and value for our shareholders.
ASX dividend stock valuation
Based on Amcor's guidance, it's trading at approximately 10x FY26's estimated earnings if it achieves the midpoint of its guidance.
For a growing business, I think it seems undervalued.
