British American Tobacco PLC (NYSE: BTI) and Philip Morris International (NYSE:PM) are both large-cap non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their profitabiliy, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Institutional & Insider Ownership

72.3% of Philip Morris International shares are owned by institutional investors. 0.2% of Philip Morris International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Philip Morris International pays an annual dividend of $4.16 per share and has a dividend yield of 3.5%. British American Tobacco PLC does not pay a dividend. Philip Morris International pays out 92.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. British American Tobacco PLC has raised its dividend for 9 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for British American Tobacco PLC and Philip Morris International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
British American Tobacco PLC 0 0 3 0 3.00
Philip Morris International 0 4 7 0 2.64

British American Tobacco PLC presently has a consensus price target of $69.00, suggesting a potential downside of 3.56%. Philip Morris International has a consensus price target of $119.91, suggesting a potential upside of 0.28%. Given Philip Morris International’s higher probable upside, analysts clearly believe Philip Morris International is more favorable than British American Tobacco PLC.

Earnings & Valuation

This table compares British American Tobacco PLC and Philip Morris International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
British American Tobacco PLC $19.34 billion 6.88 $7.60 billion N/A N/A
Philip Morris International $26.67 billion 6.96 $11.50 billion $4.51 26.51

Philip Morris International has higher revenue and earnings than British American Tobacco PLC.

Profitability

This table compares British American Tobacco PLC and Philip Morris International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
British American Tobacco PLC 25.96% 55.18% 11.01%
Philip Morris International 9.36% -66.18% 18.84%

Summary

Philip Morris International beats British American Tobacco PLC on 10 of the 15 factors compared between the two stocks.

About British American Tobacco PLC

British American Tobacco p.l.c. is a tobacco and next generation products company. The Company’s tobacco product range includes cigarettes, fine cut (roll-your-own and make-your-own tobacco) and Swedish-style snus. Its segments include Asia-Pacific, Americas, Western Europe, and Eastern Europe, Middle East and Africa (EEMEA). The Asia-Pacific segment includes its operations in various countries, including Australia, Pakistan, Malaysia, Vietnam, Japan, South Korea, Indonesia, New Zealand and Bangladesh. The Americas segment includes its operations in various countries, including Brazil, Mexico, Canada, Colombia, Argentina, Chile and Venezuela. The Western Europe segment includes its operations in various countries, including Germany, Denmark, Switzerland, Belgium, France, the United Kingdom, Romania, Spain, Italy, Poland and Croatia/Balkans. The EEMEA segment includes its operations in various countries, including Russia, Ukraine, South Africa, Turkey, Egypt, Nigeria and Algeria.

About Philip Morris International

Philip Morris International Inc. is a holding company. The Company is engaged in the manufacture and sale of cigarettes, other tobacco products and other nicotine-containing products in markets outside of the United States. Its segments include European Union (EU); Eastern Europe, Middle East & Africa (EEMA); Asia, and Latin America & Canada. The Company’s portfolio of international and local brands is led by Marlboro. Its mid-price brands are L&M, Lark, Merit, Muratti and Philip Morris. Its other international brands include Bond Street, Chesterfield, Next and Red & White. The Company also owns various local cigarette brands, such as Dji Sam Soe, Sampoerna and U Mild in Indonesia; Champion, Fortune and Jackpot in the Philippines; Apollo-Soyuz and Optima in Russia; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics and Number 7 in Canada; f6 in Germany; Delicados in Mexico; Assos in Greece, and Petra in the Czech Republic and Slovakia.

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