Philip Morris International (NYSE:PM) and Constellation Brands (NYSE:STZ) are both large-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.
Earnings & Valuation
This table compares Philip Morris International and Constellation Brands' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Philip Morris International | $77.92 billion | 1.70 | $7.19 billion | $5.19 | 16.37 |
Constellation Brands | $9.11 billion | 4.63 | $-11,800,000.00 | $9.12 | 23.88 |
Philip Morris International has higher revenue and earnings than Constellation Brands. Philip Morris International is trading at a lower price-to-earnings ratio than Constellation Brands, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
74.2% of Philip Morris International shares are held by institutional investors. Comparatively, 71.9% of Constellation Brands shares are held by institutional investors. 0.2% of Philip Morris International shares are held by insiders. Comparatively, 15.8% of Constellation Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Philip Morris International has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Constellation Brands has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.
Dividends
Philip Morris International pays an annual dividend of $4.80 per share and has a dividend yield of 5.7%. Constellation Brands pays an annual dividend of $0.93 per share and has a dividend yield of 0.4%. 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. Constellation Brands pays out 10.2% of its earnings in the form of a dividend. Philip Morris International has increased its dividend for 12 consecutive years and Constellation Brands has increased its dividend for 1 consecutive years. Philip Morris International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Philip Morris International and Constellation Brands, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Philip Morris International | 0 | 4 | 6 | 0 | 2.60 |
Constellation Brands | 0 | 9 | 11 | 1 | 2.62 |
Philip Morris International currently has a consensus price target of $97.7273, suggesting a potential upside of 15.04%. Constellation Brands has a consensus price target of $227.5238, suggesting a potential upside of 4.49%. Given Philip Morris International's higher possible upside, research analysts plainly believe Philip Morris International is more favorable than Constellation Brands.
Profitability
This table compares Philip Morris International and Constellation Brands' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Philip Morris International | 10.07% | -78.02% | 20.17% |
Constellation Brands | 21.63% | 16.09% | 7.41% |
Summary
Constellation Brands beats Philip Morris International on 11 of the 18 factors compared between the two stocks.