Altria Group (NYSE:MO) and Imperial Tobacco Group (OTCMKTS:IMBBY) Critical Analysis

Altria Group (NYSE:MO) and Imperial Tobacco Group (OTCMKTS:IMBBY) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Risk & Volatility

Altria Group has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Imperial Tobacco Group has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Dividends

Altria Group pays an annual dividend of $4.24 per share and has a dividend yield of 6.8%. Imperial Tobacco Group pays an annual dividend of $2.11 per share and has a dividend yield of 5.3%. Altria Group pays out 82.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Altria Group has raised its dividend for 56 consecutive years. Altria Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

57.4% of Altria Group shares are held by institutional investors. Comparatively, 0.0% of Imperial Tobacco Group shares are held by institutional investors. 0.1% of Altria Group shares are held by company insiders. Comparatively, 1.0% of Imperial Tobacco Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Altria Group and Imperial Tobacco Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Altria Group	37.24%	-295.26%	26.36%
Imperial Tobacco Group	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current recommendations and price targets for Altria Group and Imperial Tobacco Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Altria Group	2	5	4	0	2.18
Imperial Tobacco Group	0	1	1	0	2.50

Altria Group currently has a consensus target price of $62.11, indicating a potential upside of 0.30%. Given Altria Group’s higher possible upside, equities analysts clearly believe Altria Group is more favorable than Imperial Tobacco Group.

Earnings & Valuation

This table compares Altria Group and Imperial Tobacco Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Altria Group	$20.26 billion	5.13	$11.26 billion	$5.17	11.98
Imperial Tobacco Group	$41.10 billion	0.79	$3.31 billion	N/A	N/A

Altria Group has higher earnings, but lower revenue than Imperial Tobacco Group.

Summary

Altria Group beats Imperial Tobacco Group on 9 of the 14 factors compared between the two stocks.

About Altria Group

Altria Group, Inc., through its subsidiaries, manufactures and sells smokeable and oral tobacco products in the United States. The company offers cigarettes primarily under the Marlboro brand; large cigars and pipe tobacco under the Black & Mild brand; moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands; oral nicotine pouches under the on! brand; and e-vapor products under the NJOY ACE brand. It sells its products to distributors, as well as large retail organizations, such as chain stores. The company was founded in 1822 and is headquartered in Richmond, Virginia.

About Imperial Tobacco Group

Imperial Brands PLC, together with its subsidiaries, manufactures, imports, markets, and sells tobacco and tobacco-related products in Europe, the Americas, Africa, Asia, and Australasia. It offers a range of cigarettes, tobacco accessories, vapour, heated tobacco, and oral nicotine. The company sells its products under various brands, including JPS, Davidoff, Gauloises, West, Winston, Kool, Lambert & Butler, Fortuna, Nobel, News, Backwoods, Champion, Golden Virginia, Rizla, Blu, Pulze, Skruf, and Zone X. In addition, it engages in the distribution of tobacco and NGP products for tobacco and NGP product manufacturers; and various non-tobacco and NGP products and services. Further, the company is involved in the management of a golf course; distribution of pharmaceuticals, POS software, and published materials and other products; printing and publishing activities; and provision of long haul transportation, industrial parcel and express delivery, pharmaceutical products logistics, advertising, payment, and support management services, as well as owns the trademarks; and retails its products. Additionally, it engages in distribution of books; waste management, leaf processing related activities. Furthermore, the company is involved in research and development of e-vapour products. The company was formerly known as Imperial Tobacco Group PLC and changed its name to Imperial Brands PLC in February 2016. Imperial Brands PLC was founded in 1636 and is based in Bristol, the United Kingdom.