Philip Morris International (NYSE:PM) and Anheuser-Busch InBev SA/NV (NYSE:BUD) are both large-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.
Dividends
Philip Morris International pays an annual dividend of $4.80 per share and has a dividend yield of 5.9%. Anheuser-Busch InBev SA/NV pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. 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. Anheuser-Busch InBev SA/NV pays out 20.6% of its earnings in the form of a dividend. 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.
Earnings and Valuation
This table compares Philip Morris International and Anheuser-Busch InBev SA/NV's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Philip Morris International | $77.92 billion | 1.61 | $7.19 billion | $5.19 | 15.55 |
Anheuser-Busch InBev SA/NV | $52.33 billion | 2.57 | $9.17 billion | $4.08 | 16.33 |
Anheuser-Busch InBev SA/NV has lower revenue, but higher earnings than Philip Morris International. Philip Morris International is trading at a lower price-to-earnings ratio than Anheuser-Busch InBev SA/NV, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Philip Morris International and Anheuser-Busch InBev SA/NV, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Philip Morris International | 0 | 4 | 8 | 0 | 2.67 |
Anheuser-Busch InBev SA/NV | 2 | 15 | 7 | 0 | 2.21 |
Philip Morris International currently has a consensus target price of $96.6923, indicating a potential upside of 19.85%. Anheuser-Busch InBev SA/NV has a consensus target price of $60.25, indicating a potential downside of 9.55%. Given Philip Morris International's stronger consensus rating and higher possible upside, analysts clearly believe Philip Morris International is more favorable than Anheuser-Busch InBev SA/NV.
Profitability
This table compares Philip Morris International and Anheuser-Busch InBev SA/NV's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Philip Morris International | 10.07% | -78.02% | 20.17% |
Anheuser-Busch InBev SA/NV | -1.57% | 6.84% | 2.26% |
Risk and Volatility
Philip Morris International has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Anheuser-Busch InBev SA/NV has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.
Insider and Institutional Ownership
74.2% of Philip Morris International shares are owned by institutional investors. Comparatively, 3.8% of Anheuser-Busch InBev SA/NV shares are owned by institutional investors. 0.2% of Philip Morris International shares are owned by company insiders. Comparatively, 4.5% of Anheuser-Busch InBev SA/NV shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Philip Morris International beats Anheuser-Busch InBev SA/NV on 11 of the 17 factors compared between the two stocks.