Financial Analysis: Vector Group (VGR) & British American Tobacco p.l.c. (NYSE:BTI)

Vector Group (NYSE: VGR) and British American Tobacco p.l.c. (NYSE:BTI) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Institutional & Insider Ownership

47.3% of Vector Group shares are held by institutional investors. Comparatively, 4.5% of British American Tobacco p.l.c. shares are held by institutional investors. 12.9% of Vector Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Vector Group pays an annual dividend of $1.60 per share and has a dividend yield of 7.6%. British American Tobacco p.l.c. pays an annual dividend of $2.24 per share and has a dividend yield of 3.7%. Vector Group pays out 410.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Vector Group and British American Tobacco p.l.c.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vector Group 2.86% -36.72% 6.47%
British American Tobacco p.l.c. N/A N/A N/A

Earnings and Valuation

This table compares Vector Group and British American Tobacco p.l.c.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vector Group $1.31 billion 2.08 $293.38 million $0.39 54.18
British American Tobacco p.l.c. $20.86 billion 5.42 $8.24 billion N/A N/A

British American Tobacco p.l.c. has higher revenue and earnings than Vector Group.

Risk and Volatility

Vector Group has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, British American Tobacco p.l.c. has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Vector Group and British American Tobacco p.l.c., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vector Group 0 0 1 0 3.00
British American Tobacco p.l.c. 0 1 6 0 2.86

Vector Group presently has a consensus target price of $27.00, indicating a potential upside of 27.78%. British American Tobacco p.l.c. has a consensus target price of $69.00, indicating a potential upside of 13.49%. Given Vector Group’s stronger consensus rating and higher probable upside, analysts clearly believe Vector Group is more favorable than British American Tobacco p.l.c..

About Vector Group

Vector Group Ltd. is a holding company. The Company is engaged in the manufacture and sale of cigarettes in the United States through its Liggett Group LLC (Liggett) and Vector Tobacco Inc. (Vector Tobacco) subsidiaries, and the real estate business through its New Valley LLC subsidiary, which is seeking to acquire or invest in additional real estate properties or projects. The Company’s segments include Tobacco, E-Cigarettes and Real Estate. The Tobacco segment consists of the manufacture and sale of cigarettes. The E-Cigarettes segment includes the operations of the Company’s e-cigarette business. The Real Estate segment includes the Company’s investments in New Valley LLC. The Company owns and seeks to acquire investment interests in a range of domestic and international real estate projects through debt and equity investments.

About British American Tobacco p.l.c.

British American Tobacco p.l.c. is a tobacco and next generation products company. The Company’s tobacco product range includes cigarettes, fine cut (roll-your-own and make-your-own tobacco) and Swedish-style snus. Its segments include Asia-Pacific, Americas, Western Europe, and Eastern Europe, Middle East and Africa (EEMEA). The Asia-Pacific segment includes its operations in various countries, including Australia, Pakistan, Malaysia, Vietnam, Japan, South Korea, Indonesia, New Zealand and Bangladesh. The Americas segment includes its operations in various countries, including Brazil, Mexico, Canada, Colombia, Argentina, Chile and Venezuela. The Western Europe segment includes its operations in various countries, including Germany, Denmark, Switzerland, Belgium, France, the United Kingdom, Romania, Spain, Italy, Poland and Croatia/Balkans. The EEMEA segment includes its operations in various countries, including Russia, Ukraine, South Africa, Turkey, Egypt, Nigeria and Algeria.

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