AMC share price in focus
Amcor designs and manufactures a wide variety of packaging solutions, including flexible packaging, rigid containers, specialty cartons, and closures.
With origins dating back to the 1860s, Amcor has grown into a global leader, operating across more than 200 sites in 40 countries.
The company prioritizes innovation in packaging to address evolving consumer preferences and regulatory requirements for sustainable solutions.
PLS shares
Pilbara Minerals is a leading ASX-listed lithium company, owning 100% of the world’s largest, independent hard-rock lithium operation, Pilgangoora, which it acquired in 2014.
Pilbara’s primary business is to find, process, and sell spodumene concentrate (basically rocks with lithium in them). It sells its concentrate through “offtake” agreements and spot sales on the Battery Material Exchange (BMX) platform. A good example of an offtake partner is Great Wall (the Chinese car company) or POSCO, a South Korean steelmaker.
Demand for lithium has grown steadily in recent years on the back of developments in electric vehicles and renewable energy technology. Some investors would call Pilbara a ‘pure play’ investment in demand for green tech given their direct involvement with lithium. However, as a commodities producer, its revenue is still at the mercy of (sometimes dramatic) fluctuations in the price of spodumene in the global market.
AMC & PLS share price valuation
We would consider AMC to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Amcor CDI reported a debt/equity ratio of 187.0%, meaning the company is leveraged (it has more debt than equity). This can increase risk so it’s important that a leveraged company is generating stable returns and has sufficient cash flow to pay interest on its debts.
Over the last 5 years, AMC has delivered an average dividend yield of 4.4% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, AMC reported an ROE of 18.4%. For a mature business you generally want to see an ROE of more than 10%, so AMC clears this hurdle.
As a growth company, some of the trends we might consider from PLS shares include revenue growth, profit growth, and return on equity (ROE). I say ‘trends’ because it’s always important to look at these figures over a few years. The trend is much more valuable info than a single measure at one point in time.
Over the last 3 years, PLS has increased revenue at a rate of 92.5% per year to hit $1,254m in FY24. Meanwhile, net profit has increased from -$51m to $257m. PLS’s last reported ROE was 7.7%.
Please keep in mind that context is important. These metrics give us some indication of company performance, but it’s just the start of valuing AMC or PLS shares. To learn more about valuation, check out one of our free online investing courses.
