Amcor plc

New York Stock Exchange
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Bearish -50

Should you buy Amcor shares for the 7% dividend yield?

📉 Amcor shares are down 22.24% over the last year, significantly underperforming the 5.31% gains of the S&P/ASX 200 benchmark index.

💰 The company has increased its dividend payouts to quarterly releases rather than the previous twice-yearly schedule, offering a current yield of approximately 7%.

📊 Total declared dividends for the first two quarters of 2026 reached $1.84 per share, a sharp increase from the previous year's total of 39.4 cents.

⏳ Investors can still receive the latest 91-cent March quarter dividend by holding shares until market close on May 26, with payment due on June 17.

📈 Underlying financial performance has strengthened, with quarterly net sales rising 77% year-on-year to US$5.91 billion.

💸 Adjusted EBITDA surged by 87% to US$892 million as the company ramps up payouts following its acquisition of Berry Global last year.

⚠️ The stock has faced significant selling pressure since February highs, dropping from $67.84 to $55.32 amid geopolitical and market concerns.

🛢️ Key risks include rising plastic resin costs driven by petrochemical and oil prices, which have dampened investor enthusiasm.

⚙️ Macroeconomic headwinds such as the Reserve Bank of Australia's interest rate hikes, a strengthening Australian dollar, and regional conflict impacts earnings visibility.

🛑 Analyst Remo Greco from Sanlam Private Wealth issued a 'hold' rating, suggesting recent price declines may be excessive compared to peer valuations.

📉 Greco noted that the current yield is above 7% and predicted that a de-escalation of Middle East tensions would reduce earnings risk.

🔄 This article distinguishes between The Motley Fool Australia's author and the parent company, which maintains an existing position in and recommends Amcor.

💡 Despite the high dividend yield, Motley Fool expert Scott Phillips excluded Amcor from his current list of top five stock recommendations for investors.

Bullish Signals
  • Amcor shares recently closed up 0.51%, trading for $55.25, indicating short-term market recovery.
  • Following the acquisition of Berry Global, Amcor has significantly ramped up its dividends, offering a quarterly payout frequency favored by passive income investors.
  • The company declared two unfranked dividends totaling $1.84 a share in the first two quarters of 2026, representing a substantial increase from the previous 39.4 cents per share over the same period.
  • Quarterly net sales surged by 77% year-on-year to US$5.91 billion, demonstrating strong top-line growth despite broader market headwinds.
  • Adjusted EBITDA jumped by 87% to US$892 million, highlighting improved operational profitability and cost management.
  • Analyst Remo Greco notes the stock trades notably below peers and recently yielded more than 7%, suggesting potential value at current price levels.
  • A de-escalation of Middle East tensions would lower earnings risk, presenting a clear positive catalyst that could support share price recovery.
  • Amcor's dividend is currently up for grabs with an ex-dividend date of 27 May, offering an opportunity to capture the payout before market close.
Risk Factors
  • Amcor shares have significantly underperformed, down 22.24% over the last 12 months while the broader S&P/ASX 200 Index gained 5.31%.
  • The stock price has fallen from a high of $67.84 on February 27 to $55.32 by May 7, representing a drop linked to investor concerns about rising plastic resin costs tied to petrochemical and oil prices.
  • Macroeconomic headwinds include the Reserve Bank of Australia's three consecutive interest rate hikes in 2026 and a resulting rise in the Australian dollar, which negatively impacts the company.
  • The geopolitical situation involving the Iran war has introduced significant earnings risk and contributed to the sell-off pressure on the stock.
  • Sanlam Private Wealth analyst Remo Greco issued a 'hold' recommendation for Amcor shares rather than a buy rating.
  • Motley Fool investing expert Scott Phillips did not include Amcor Plc among his top 5 stocks recommended for purchase right now.
Full Analysis
Amcor PLC shares are currently trading at $55.25, representing a 22.24% decline over the last year compared to the 5.31% gain in the S&P/ASX 200 Index. The article notes that since completing its acquisition of Berry Global last year, Amcor has significantly increased its dividends, making it attractive to passive income investors with quarterly payouts rather than semi-annual ones. In the first two quarters of 2026 alone, the company declared unfranked dividends totaling $1.84 a share, an increase from the previous 39.4 cents; specifically, the March quarter dividend of 91 cents is still available to current shareholders as of market close on May 26, payable on June 17. Financial performance remains strong despite the recent price decline, with quarterly net sales rising 77% year-on-year to US$5.91 billion and adjusted EBITDA jumping 87% to US$892 million. However, Sanlam Private Wealth analyst Remo Greco has maintained a "Hold" recommendation due to heavy selling pressure since February highs. This price weakness is attributed to concerns over rising plastic resin costs linked to petrochemical and oil prices, RBA interest rate hikes increasing the Aussie dollar, ongoing Middle East conflict tensions including the Iran war, and potential supply constraints. Greco argues that the sell-off may have been excessive given the stock trades at a discount to peers and yields over 7%, noting that a de-escalation of Middle East tensions would lower earnings risk. Conversely, Motley Fool investing expert Scott Phillips did not include Amcor in his list of five best stocks for investors to buy right now, suggesting there may be better alternatives available in the current market despite Amcor's attractive yield and recent operational improvements.