Analyzing British American Tobacco (NYSE:BTI) & Japan Tob (OTCMKTS:JAPAY)

Japan Tob (OTCMKTS:JAPAY) and British American Tobacco (NYSE:BTI) are both large-cap consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Profitability

This table compares Japan Tob and British American Tobacco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Tob	14.55%	11.97%	6.14%
British American Tobacco	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations for Japan Tob and British American Tobacco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Tob	1	0	0	1	2.50
British American Tobacco	2	1	5	0	2.38

Japan Tob presently has a consensus target price of $17.00, suggesting a potential downside of 9.91%. British American Tobacco has a consensus target price of $51.00, suggesting a potential downside of 11.76%. Given Japan Tob’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Japan Tob is more favorable than British American Tobacco.

Insider & Institutional Ownership

16.2% of British American Tobacco shares are owned by institutional investors. 0.0% of British American Tobacco shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Japan Tob pays an annual dividend of $0.41 per share and has a dividend yield of 2.2%. British American Tobacco pays an annual dividend of $2.95 per share and has a dividend yield of 5.1%. Japan Tob pays out 45.1% of its earnings in the form of a dividend.

Volatility & Risk

Japan Tob has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, British American Tobacco has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Valuation & Earnings

This table compares Japan Tob and British American Tobacco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Tob	$20.83 billion	3.22	$3.06 billion	$0.91	20.74
British American Tobacco	$25.60 billion	4.63	$3.92 billion	N/A	N/A

British American Tobacco has higher revenue and earnings than Japan Tob.

Summary

British American Tobacco beats Japan Tob on 9 of the 15 factors compared between the two stocks.

About Japan Tob

Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, pharmaceuticals, and processed foods in Japan and internationally. The company operates through three segments: Tobacco Business, Pharmaceutical, and Processed Food. It offers tobacco products, such as cigarettes, heat-not-burn tobacco products, E-vapor products, fine cut tobacco products, cigars, pipes, smokeless tobacco products, and hookah and kretek products. The company also provides reduced-risk products, including infused tobacco capsules and heated tobacco sticks. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, kidney and metabolism, immunity/inflammation, and central nervous system. Further, the company provides frozen and room-temperature products, such as frozen udon noodles, packed rice, and frozen okonomiyaki; bakery products; and seasonings, including yeast extracts, assembled, kelp and bonito extracts, and oyster sauces. It offers its products under the Winston, Camel, MEVIUS, and LD brands. Japan Tobacco Inc. was incorporated in 1985 and is headquartered in Tokyo, Japan.

About British American Tobacco

British American Tobacco p.l.c. engages in the provision of tobacco and nicotine products to consumers worldwide. It also offers vapour, heated, and modern oral nicotine products; combustible cigarettes; and traditional oral products, such as snus and moist snuff. The company offers its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Camel, Natural American Spirit, Newport, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, State Express 555 and Shuang Xi brands. It also distributes its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is based in London, the United Kingdom.