Tobacco stocks have been big winners for investors who've stuck with them over the long haul. Altria Group (NYSE:MO) has been one of the giants of the group for decades, while Philip Morris International (NYSE:PM) has only a decade of history as a separate publicly traded company.

Because both Altria and Philip Morris International share the Marlboro brand and engage in collaborative efforts on alternative products, it's tempting just to think of them as interchangeable. But the two stocks actually behave much differently, and that can make one a buy even when the other doesn't deserve as much attention. The following measures can give you a better sense about which tobacco stock might be better for your portfolio.

Loose tobacco going up conveyor belt at production facility.

Image source: Philip Morris International.

Valuation and stock performance

Neither Altria nor Philip Morris has done very well lately. Altria's stock price is down 21% since May 2017, while Philip Morris has dropped an even more precipitous 29% over the same time span.

In terms of valuation, it's a bit tough to compare the two stocks using trailing earnings measures because tax reform and other one-time issues have had a dramatic impact on recent bottom-line results. Charges to Philip Morris' bottom line give that stock a trailing earnings multiple of 21, while boosts have helped cut its trailing multiple to just 10. When you look at future earnings estimates, though, the disparity narrows considerably. Altria still has a slight advantage, trading at 13 times forward earnings compared to 14 for Philip Morris. Numbers are also close together when you consider enterprise value-based measures. For the most part, though, these two stocks look very similar on a valuation basis.

Dividends

Altria and Philip Morris have both had good dividends for a long time. Right now, the two stocks have yields that are very close to each other, with Philip Morris International's 5.3% yield just nosing out Altria at 5.1%.

However, in terms of dividend growth, Altria has been doing a good job of catching up. The company made an early dividend boost this year, implementing a 6% increase that went well with its traditional autumn-season hike of 8% last August. By contrast, Philip Morris has seen its dividend growth slow considerably over the years, going from typical double-digit percentage increases early in its history to boosts of 2% to 3% over the past few years. In addition, Altria's payout ratio looks more sustainable than Philip Morris', and that combination shifts the balance to Altria over Philip Morris on the dividend front.

Growth prospects and risks

Altria and Philip Morris have many of the same growth prospects and face many of the same risks. Key rival British American Tobacco (NYSE:BTI) has now wrapped worldwide operations into a single entity by having merged with Reynolds American, and BAT is fighting against both Altria and Philip Morris both in the traditional cigarette area and in reduced-risk products. Both Altria and Philip Morris are hoping that the U.S. Food and Drug Administration will approve its modified-risk tobacco product application to have the iQOS heated tobacco system available to sell in the U.S., as Altria would have the direct sales rights and would pay Philip Morris a licensing fee if successful. Moreover, both would be affected by an FDA proposal to cut nicotine levels in cigarettes dramatically. Even though Philip Morris' international operations wouldn't necessarily see immediate and direct effects from U.S. cigarette regulation, foreign governments have signaled their willingness to follow in the footsteps of their peers in regulating both cigarettes and alternative products.

That said, the risks aren't entirely the same. Philip Morris International has the additional problem of having always to be conscious of currency impacts on its dollar-denominated results. Over the past year, the U.S. dollar has finally started to give back some of the ground it gained during several previous years. But as interest rates have risen, the greenback has bounced higher again, and that could create new and unanticipated headwinds to Philip Morris earnings that could put it at a disadvantage. Meanwhile, Altria has a more diversified set of businesses under its corporate umbrella, with both its wine segment and its stake in beer giant Anheuser-Busch InBev giving it at least some protection against conditions in the tobacco market that Philip Morris doesn't share.

In the end, which stock you pick depends on your views of the prospects for iQOS and traditional cigarettes. Philip Morris has been more aggressive in encouraging reduced-risk products, and despite some recent sluggishness in iQOS sales in the Japanese market, a global expansion could bring Philip Morris a lot of success. But if iQOS doesn't become the blockbuster that Philip Morris hopes, Altria will be in a much better position to fall back on the strength of all of its businesses. For now, Altria looks like the safer bet.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Anheuser-Busch InBev NV. The Motley Fool has a disclosure policy.