Amcor plc (NYSE:AMCR) isn’t a flashy business. Most people probably don’t know much about the company, even though they come across its products every day. The company makes the packaging used for food, drinks, healthcare products, beauty products, and plenty of other everyday items.
That gives the company an interesting quality from an investment perspective. Consumers may cut back on certain purchases when the economy gets tougher, but they still need to buy food, medicine, and other basic products. About 60% of Amcor’s markets are tied to nutrition, while health, beauty, and wellness make up another 25%. Billionaires are gravitating towards another packaging company, and that has also returned nearly 20% in the past year. Find here.
The company’s size is another advantage. Amcor operates across a large global manufacturing network and has relationships with major customers that have been built over many years. It also offers a wide range of packaging formats and materials. For a large multinational customer, being able to deal with one supplier across multiple markets can be a meaningful advantage. The Berry Global acquisition has made Amcor even larger, although it also brought more debt onto the balance sheet.
The Dividend Is Attractive, But Cash Flow Matters
Amcor plc (NYSE:AMCR) pays $0.65 per share every quarter, giving investors an annual dividend of $2.60. At the October 7 closing price of $41.26, that works out to a yield of about 6.3%. That’s a big yield for a company selling products that are tied to everyday consumption. However, a high yield doesn’t automatically make a dividend attractive. What matters is whether the business can actually afford to keep paying it. Amcor’s latest numbers offer some comfort. Its steady dividend growth is one reason the stock remains popular with income-focused investors.
The company generated $1.303 billion in free cash flow during fiscal 2026, while adjusted diluted EPS came in at $4.02, up 13% from the previous year. Amcor also increased its annual dividend to $2.60. On an adjusted earnings basis, the payout ratio is around 65%. That’s not unusual for a mature company and doesn’t immediately raise a red flag.
GAAP earnings make the situation look tighter. Amcor reported diluted EPS of $2.38 for fiscal 2026, which was actually below its $2.60 annual dividend. That’s why investors would probably pay more attention to the cash-flow numbers here. Amcor has roughly 462 million shares outstanding, so the annual dividend costs the company about $1.2 billion. With $1.3 billion of free cash flow, the dividend was covered last year. But there’s not a huge cushion.
In addition, Amcor has another use for that cash: its debt. The company ended fiscal 2026 with $12.9 billion in net debt. The Berry acquisition has increased Amcor’s scale and broadened its business, but investors shouldn’t expect all of the company’s excess cash to go toward dividends. Paying down debt is going to be an important part of the story too.
Is Amcor Stock Cheap?
At roughly $41 a share, Amcor trades at about 10.1x forward earnings based on current market data. That is a fairly modest multiple. The stock’s trailing P/E is around 17.5x, while its forward P/E was about 11.3x in fiscal 2025 and roughly 13.4x in fiscal 2024. So investors are paying less for each dollar of Amcor’s expected earnings than they were a couple of years ago.
The 10.1x forward P/E also means the stock has an earnings yield of roughly 10%. That’s worth putting into context. The 10-year U.S. Treasury yield was around 5.3% in early October 2026. Amcor’s dividend yield is about 6.3%, meaning the stock offers a higher current income yield than the Treasury. Its earnings yield is higher still, at around 10%. Of course, that’s not an apples-to-apples comparison. A Treasury doesn’t have $12.9 billion of net debt, doesn’t have to integrate an acquisition, and doesn’t depend on future business performance to generate its return. However, Amcor does, and that’s also part of the reason the stock can trade at a relatively low multiple.
The Bottom Line
There is a fairly simple argument for Amcor at today’s price. Investors are getting a 6.3% dividend yield from a company whose products are tied to everyday consumption, and the latest results show that the business is still generating enough cash to cover the payout. Adjusted earnings grew 13% in fiscal 2026, while free cash flow came in at $1.3 billion.
The valuation is another part of the appeal. At around 10.1x forward earnings, the stock isn’t priced as if investors are expecting a lot of growth. That doesn’t mean there aren’t risks. The dividend isn’t backed by a huge free-cash-flow surplus, debt is high, and Amcor still needs to prove that the Berry acquisition can deliver the benefits investors are expecting.
However, that’s what makes the current valuation important. Investors don’t need Amcor to become a high-growth company for the stock to work. If earnings hold up, cash flow remains healthy, and the company gradually reduces its debt, shareholders could collect a sizable dividend while also getting some help from earnings growth and potentially a higher valuation. For an income investor, that’s probably the more interesting part of the Amcor story. The 6.3% yield gets your attention, but the roughly 10x forward P/E is what makes you want to look twice.
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This article is originally published at Insider Monkey.
