Philip Morris stock is seen as a better choice over Union Pacific due to potential growth.

From NASDAQ.: 2024-05-22 21:45:31

1. Regarding investment prospects, Philip Morris stock (NYSE: PM) is seen as a better choice compared to Union Pacific stock (NYSE: UNP), with both companies having similar market capitalizations. UNP stock has seen a 15% increase while PM stock has risen by 20% in recent years, but both underperformed the S&P 500 in 2021 and 2023.

2. Union Pacific has shown slightly better revenue growth compared to Philip Morris, driven by strong recovery in demand post-pandemic. Philip Morris, with its non-U.S. tobacco sales, expects mid-single-digit revenue growth fueled by IQOS. UNP, however, may experience low-single-digit revenue expansion due to weak demand dynamics.

3. Union Pacific boasts higher profitability over Philip Morris, with a better operating margin. Despite Philip Morris having a higher debt percentage, it also holds a larger cash cushion. These factors contribute to the analysis of which stock may offer better returns over the next three years, with PM showing promise.

4. In terms of valuation multiples, PM currently has a lower P/S ratio compared to its historical average, positioning it well for potential growth. Given the performance metrics and historical averages, it is predicted that PM will outperform UNP in the coming years, mainly driven by the continued growth of IQOS products.

5. Recent return figures show PM outperforming and showing potential for future growth. The Trefis Reinforced Value Portfolio offers insights with demonstrated market-beating portfolios. It is projected that PM will continue to outperform UNP in the next three years, making it a favorable choice for investors looking for sustained growth and returns.



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