Exploring the Sustainability and Growth of Amcor PLC's Dividends
Amcor PLC (AMCR, Financial) recently announced a dividend of $0.13 per share, payable on 2024-06-11, with the ex-dividend date set for 2024-05-21. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Amcor PLC's dividend performance and assess its sustainability.
What Does Amcor PLC Do?
Amcor is a global producer of plastic packaging primarily for the fast-moving consumer goods industry. About 85% of earnings are exposed to the flexible packaging business. This is soft disposable plastic for a variety of food, drink, healthcare, and hygiene products. The remainder of earnings are from the Latin and North American rigids business, which is primarily beverage bottling for the soft drink industry. Operating in more than 35 countries, Amcor has market share in its established regions of North America, Latin America, Europe, and Asia-Pacific. About half of group sales are derived from North America and the remainder is split equally between Western Europe and emerging markets. Australia and New Zealand sales make up less than 5% of group sales.
A Glimpse at Amcor PLC's Dividend History
Amcor PLC has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Amcor PLC's Dividend Yield and Growth
As of today, Amcor PLC currently has a 12-month trailing dividend yield of 4.86% and a 12-month forward dividend yield of 4.91%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Amcor PLC's annual dividend growth rate was 1.60%. Based on Amcor PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Amcor PLC stock as of today is approximately 4.86%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Amcor PLC's dividend payout ratio is 0.88, which may suggest that the company's dividend may not be sustainable. Amcor PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Amcor PLC's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Amcor PLC's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Amcor PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Amcor PLC's revenue has increased by approximately 8.60% per year on average, a rate that outperforms approximately 60.16% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Amcor PLC's earnings increased by approximately 18.30% per year on average, a rate that outperforms approximately 70.4% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 9.70%, which outperforms approximately 62.22% of global competitors.
Conclusion
In conclusion, while Amcor PLC's dividend payments, growth rate, and payout ratio indicate a strong dividend profile, investors should consider the sustainability concerns highlighted by the payout ratio. With a solid profitability and growth metrics, Amcor PLC appears well-positioned to maintain its dividend payments in the foreseeable future. For those interested in further dividend opportunities, GuruFocus Premium users can explore high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
