Lorillard (NYSE: LO) and Altria Group (NYSE:MO) are both non-cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitabiliy.
Dividends
Altria Group pays an annual dividend of $2.44 per share and has a dividend yield of 3.6%. Lorillard does not pay a dividend. Altria Group pays out 32.2% of its earnings in the form of a dividend. Lorillard has raised its dividend for 8 consecutive years and Altria Group has raised its dividend for 9 consecutive years.
Valuation and Earnings
This table compares Lorillard and Altria Group’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Lorillard | N/A | N/A | N/A | N/A | N/A |
| Altria Group | $19.40 billion | 6.67 | $9.66 billion | $7.58 | 8.83 |
Altria Group has higher revenue and earnings than Lorillard.
Profitability
This table compares Lorillard and Altria Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lorillard | 16.49% | N/A | 28.79% |
| Altria Group | 56.98% | 59.50% | 14.24% |
Analyst Recommendations
This is a summary of recent recommendations for Lorillard and Altria Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lorillard | 0 | 0 | 0 | 0 | N/A |
| Altria Group | 1 | 6 | 5 | 0 | 2.33 |
Altria Group has a consensus price target of $72.42, indicating a potential upside of 8.18%. Given Altria Group’s higher possible upside, analysts plainly believe Altria Group is more favorable than Lorillard.
Institutional & Insider Ownership
62.0% of Altria Group shares are held by institutional investors. 0.2% of Altria Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Altria Group beats Lorillard on 9 of the 11 factors compared between the two stocks.
Lorillard Company Profile
Lorillard, Inc. (Lorillard) is a tobacco company. The Company is engaged in the manufacture and sale of cigarettes products. The Company operates through two segments: Cigarettes and Electronic Cigarettes. The Cigarettes segment consists of the operations of Lorillard, Inc., Lorillard Tobacco and related entities. The Electronic Cigarettes segment consists of the operations of LOEC, Inc. (blu eCigs), Cygnet U.K. Trading Limited (SKYCIG) and related entities. The Company’s Newport brand includes both menthol and non-menthol product offerings. The Company’s product line includesbrand families marketed under the name Kent, True, Maverick, and Old Gold. These five brands include 45 various product offerings, which vary in price, taste, flavor, length and packaging. The Company also sells electronic cigarettes directly to adult consumers over the Internet. It produces cigarettes for both the premium and discount segments of the domestic cigarette market.
Altria Group Company Profile
Altria Group, Inc. is a holding company. The Company’s segments include smokeable products, smokeless products and wine. The Company’s subsidiaries include Philip Morris USA Inc. (PM USA), which is engaged in the manufacture and sale of cigarettes in the United States; John Middleton Co. (Middleton), which is engaged in the manufacture and sale of machine-made cigars and pipe tobacco, and UST LLC (UST), which, through its subsidiaries, including U.S. Smokeless Tobacco Company LLC (USSTC) and Ste. Michelle Wine Estates Ltd. (Ste. Michelle), is engaged in the manufacture and sale of smokeless tobacco products and wine. Its other operating companies include Nu Mark LLC (Nu Mark), a subsidiary that is engaged in the manufacture and sale of tobacco products, and Philip Morris Capital Corporation (PMCC), a subsidiary that maintains a portfolio of finance assets. Other subsidiaries include Altria Group Distribution Company and Altria Client Services LLC.
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