Comparing Pharming Group (PHGUF) and British American Tobacco (BTI)

British American Tobacco (NYSE: BTI) and Pharming Group (OTCMKTS:PHGUF) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Valuation and Earnings

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This table compares British American Tobacco and Pharming Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
British American Tobacco $26.15 billion 4.95 $48.37 billion $3.68 16.50
Pharming Group $17.57 million 52.07 -$19.40 million ($0.05) -31.60

British American Tobacco has higher revenue and earnings than Pharming Group. Pharming Group is trading at a lower price-to-earnings ratio than British American Tobacco, indicating that it is currently the more affordable of the two stocks.

Dividends

British American Tobacco pays an annual dividend of $2.02 per share and has a dividend yield of 3.3%. Pharming Group does not pay a dividend. British American Tobacco pays out 54.9% of its earnings in the form of a dividend.

Insider & Institutional Ownership

8.8% of British American Tobacco shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
British American Tobacco N/A N/A N/A
Pharming Group -69.48% -259.69% -33.75%

Analyst Ratings

This is a summary of current recommendations and price targets for British American Tobacco and Pharming Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
British American Tobacco 0 1 8 0 2.89
Pharming Group 0 0 2 0 3.00

British American Tobacco currently has a consensus target price of $78.50, indicating a potential upside of 29.28%. Given British American Tobacco’s higher possible upside, analysts plainly believe British American Tobacco is more favorable than Pharming Group.

Risk & Volatility

British American Tobacco has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Pharming Group has a beta of 3.26, suggesting that its stock price is 226% more volatile than the S&P 500.

Summary

British American Tobacco beats Pharming Group on 11 of the 15 factors compared between the two stocks.

British American Tobacco Company Profile

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.

Pharming Group Company Profile

Pharming Group NV (Pharming) is a Netherlands-based biotechnology company. The Company operates through two business segments, including Recombinant proteins, and DNage. Pharming focuses on the development, production and commercialization of human therapeutic proteins to be used as innovative therapies. The Company’s products are aimed at treatments for genetic disorders and surgical and traumatic bleeding. Pharming’s technologies include novel transgenic platforms for the production of biopharmaceuticals, as well as technology and processes for the purification and formulation of these biopharmaceuticals. The Company’s commercial partners are: Santarus, Sobi, MegaPharm, Eczacibasi, Transmedic and Hyupjin. The Company operates worldwide. In March 2014, it announced downsizing of the Dutch operations following from strategic re-emphasis on collaborative development efforts and out-sourcing of non-core activities.

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