OOver the past three months, the tobacco industry (Tobacco) has been one of the top growth leaders in the S&P 500 index, up 17.3%.
Some of the largest companies in this industry (by market capitalization): Philip Morris International ($186.1B) and Altria Group ($86.3B). They both manufacture tobacco products and alternative smoking products. Until 2008, PMI was the international division of Altria Group.
Based on the latest quarterly reporting data, we analyzed the profitability, strength, and efficiency criteria for each company according to the methodology of Stanford University professor Joseph Piotroski.
As you can see, Altria Group is showing stronger results in terms of fundamentals. The company outperforms its competitor Philip Morris International in terms of sustainability.
Over the past 3 months, Philip Morris International’s shares have risen by +20.8%, and Altria Group’s by +10.1% (the S&P 500 index is up +4.3%). Both companies performed better than the index.
So, there is no winner in this issue. Altria Group’s business outperformed in terms of change in return on assets, financing and asset turnover, but Philip Morris International looks healthier in terms of accumulation and operating margin, and the company’s shares show better yield.
* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
