The Kraft Heinz (NASDAQ:KHC) and Philip Morris International (NYSE:PM) are both large-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.
Analyst Recommendations
This is a summary of recent recommendations and price targets for The Kraft Heinz and Philip Morris International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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The Kraft Heinz | 2 | 8 | 8 | 0 | 2.33 |
Philip Morris International | 0 | 4 | 8 | 0 | 2.67 |
The Kraft Heinz currently has a consensus price target of $34.5556, suggesting a potential upside of 5.00%. Philip Morris International has a consensus price target of $96.6923, suggesting a potential upside of 19.85%. Given Philip Morris International's stronger consensus rating and higher probable upside, analysts plainly believe Philip Morris International is more favorable than The Kraft Heinz.
Institutional & Insider Ownership
58.9% of The Kraft Heinz shares are owned by institutional investors. Comparatively, 74.2% of Philip Morris International shares are owned by institutional investors. 0.5% of The Kraft Heinz shares are owned by company insiders. Comparatively, 0.2% of Philip Morris International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
The Kraft Heinz has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Philip Morris International has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.
Profitability
This table compares The Kraft Heinz and Philip Morris International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
The Kraft Heinz | -1.92% | 6.80% | 3.41% |
Philip Morris International | 10.07% | -78.02% | 20.17% |
Dividends
The Kraft Heinz pays an annual dividend of $1.60 per share and has a dividend yield of 4.9%. Philip Morris International pays an annual dividend of $4.80 per share and has a dividend yield of 5.9%. The Kraft Heinz pays out 56.1% of its earnings in the form of a dividend. Philip Morris International pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Philip Morris International has raised its dividend for 12 consecutive years. Philip Morris International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares The Kraft Heinz and Philip Morris International's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
The Kraft Heinz | $24.98 billion | 1.61 | $1.94 billion | $2.85 | 11.55 |
Philip Morris International | $77.92 billion | 1.61 | $7.19 billion | $5.19 | 15.55 |
Philip Morris International has higher revenue and earnings than The Kraft Heinz. The Kraft Heinz is trading at a lower price-to-earnings ratio than Philip Morris International, indicating that it is currently the more affordable of the two stocks.
Summary
Philip Morris International beats The Kraft Heinz on 12 of the 16 factors compared between the two stocks.