Dividend investors often face a frustrating trade-off.
The highest-quality income shares on the ASX frequently trade at premium valuations, which means the dividend yield can look relatively modest. On the other hand, the Australian stocks offering the biggest yields sometimes come with elevated risk.
Every so often, though, a well-established business falls out of favour and the share price drops to a level where both valuation and income start to look compelling.
Right now, I think Amcor Plc (ASX: AMC) fits that description.
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A global packaging giant
Amcor is one of the world's largest packaging companies, supplying flexible and rigid packaging solutions to major consumer brands across food, beverages, healthcare, and household products.
What I like about this business is the resilience of its end markets. Demand for packaging tends to remain relatively stable even when economic conditions weaken, because consumers continue to buy everyday essentials.
That kind of stability can be valuable for income investors. Companies operating in defensive industries often have greater visibility over future cash flows, which supports their ability to maintain and grow dividends over time.
Amcor's global footprint also provides diversification across markets and customers, reducing reliance on any single economy or industry.
A share price pullback
Despite these strengths, the Australian dividend stock has been under pressure and is down roughly 25% from its recent highs.
When I see a well-established business fall that far, I tend to take a closer look. Sometimes the market is signalling deeper problems, but other times the decline creates an opportunity for long-term investors.
In Amcor's case, the current valuation looks relatively modest for a company with stable earnings and strong cash flow.
Attractive income potential
Based on consensus estimates compiled by CommSec, Amcor is expected to generate earnings per share of $5.39 in FY26, rising to $5.77 in FY27 and $6.50 in FY28.
With the shares currently trading at $59.58, that places the stock on roughly 11 times forecast FY26 earnings.
At the same time, the dividend outlook looks very appealing to me.
Consensus forecasts point to dividends per share of $3.68 in FY26, increasing slightly to $3.75 in FY27 and $3.82 in FY28. At the current share price, that equates to a forward dividend yield of about 6.2%.
For investors seeking income, that is a meaningful yield from a business with global scale and relatively defensive demand.
A long-term income opportunity
Amcor is unlikely to be the fastest-growing company on the ASX, but that may not matter for income investors.
The appeal here lies in reliable earnings, strong cash generation, and the ability to distribute a large portion of profits back to shareholders.
With the shares trading at a relatively modest earnings multiple and offering a yield above 6%, I think this Australian dividend stock could be worth considering as a long-term income holding.
