The Estée Lauder Companies (NYSE:EL) and Philip Morris International (NYSE:PM) are both large-cap consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.
Institutional & Insider Ownership
55.5% of The Estée Lauder Companies shares are held by institutional investors. Comparatively, 74.0% of Philip Morris International shares are held by institutional investors. 14.0% of The Estée Lauder Companies shares are held by insiders. Comparatively, 0.2% of Philip Morris International shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and price targets for The Estée Lauder Companies and Philip Morris International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Estée Lauder Companies | 1 | 3 | 14 | 0 | 2.72 |
| Philip Morris International | 0 | 1 | 10 | 0 | 2.91 |
The Estée Lauder Companies presently has a consensus price target of $226.8947, suggesting a potential upside of 1.27%. Philip Morris International has a consensus price target of $94.80, suggesting a potential upside of 34.93%. Given Philip Morris International's stronger consensus rating and higher probable upside, analysts plainly believe Philip Morris International is more favorable than The Estée Lauder Companies.
Profitability
This table compares The Estée Lauder Companies and Philip Morris International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Estée Lauder Companies | 4.79% | 34.57% | 8.69% |
| Philip Morris International | 9.54% | -80.24% | 19.91% |
Valuation and Earnings
This table compares The Estée Lauder Companies and Philip Morris International's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Estée Lauder Companies | $14.29 billion | 5.64 | $684 million | $4.12 | 54.28 |
| Philip Morris International | $77.92 billion | 1.40 | $7.19 billion | $5.19 | 13.49 |
Philip Morris International has higher revenue and earnings than The Estée Lauder Companies. Philip Morris International is trading at a lower price-to-earnings ratio than The Estée Lauder Companies, indicating that it is currently the more affordable of the two stocks.
Dividends
The Estée Lauder Companies pays an annual dividend of $1.92 per share and has a dividend yield of 0.9%. Philip Morris International pays an annual dividend of $4.80 per share and has a dividend yield of 6.9%. The Estée Lauder Companies pays out 46.6% 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. The Estée Lauder Companies has raised its dividend for 7 consecutive years.
Volatility & Risk
The Estée Lauder Companies has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Philip Morris International has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.
Summary
Philip Morris International beats The Estée Lauder Companies on 9 of the 16 factors compared between the two stocks.
