About: Orora provides an extensive range of tailored packaging solutions and displays, including glass bottles, aluminium cans, bottle caps, boxes and cartons. The company was spun-out of Amcor PLC in December 2013.

Why it is in the portfolio: Orora provides the portfolio with an exposure to the Materials sector while diversifying away from the metals and mining industries. With more than 35% of earnings originating in North America, Orora also diversifies the portfolio geographically. It currently trades near the bottom of its historical forward P/E range and is also attractively priced relative to other mid-cap non-mining materials companies. Its fundamentals look healthy with an attractive dividend (50% franked), a reasonable payout ratio and medium-to-low debt levels.

Fundamentals: Orora has a 1-year forward P/E of 17.5x, a 1-year forward gross dividend yield of 5.1% with a payout ratio of 73%. Its debt-to-assets ratio sits at 21% and it has a Price-to-Book ratio of 2.3x.

What could go wrong: As any materials/manufacturing company, Orora could be negatively affected by a rise in its input materials prices. It is also particularly sensitive to rises in gas and electricity prices. Orora is an economically sensitive company that could be negatively impacted by a slow down in economic conditions in Australia and in North America.