With the markets plunging into bear market territory -- typically defined as a 20% fall from recent highs -- defensive, high-yield dividend stocks have become even more appealing to many investors. 

Consumer staple titans Procter & Gamble (NYSE:PG) and Altria (NYSE:MO) -- with their current 3.2% and 6.5% dividend yields -- fit this description well. But which of these stocks is the better buy today?

A bear roaring

With the bears roaring, investors may want to take a look at defensive stocks like Altria and Procter & Gamble. Image source: Getty Images.

Risk profile

Altria has long dominated the U.S. tobacco market, with popular brands such as Marlboro helping it claim 50% of the industry's sales.  Yet with traditional cigarette consumption declining, Altria is making aggressive moves into electronic cigarettes and marijuana-based products. While these areas could represent sizable new growth opportunities for Altria, the tobacco king faces far greater competition in these areas than it does in the traditional cigarette market. It's also not yet clear whether growth in these business segments will be enough to offset the decline of Altria's core cigarette business, which still represents the majority of its revenue and profits.

Like Altria, Procter & Gamble is facing significant challenges. In recent years, e-commerce upstarts have been able to chip away at its market share in lucrative areas such as its Gillette shaving business. However, Procter & Gamble is beginning to take back share with e-commerce initiatives of its own.

P&G is also a more diversified business than Altria. The consumer goods giant's product lines span across diapers, detergent, toothpaste, shampoo, nutritional supplements, and many other areas, with leading brands such as Pampers, Tide, Crest, Head & Shoulders, and Metamucil.

P&G's diverse revenue streams make it less reliant on any single business segment to fuel its growth, thereby reducing its risk profile for investors. Conversely, declining demand for its traditional tobacco products remains a serious threat to the long-term health of Altria's business, despite the sizable potential of its marijuana and e-cig investments. As such, Procter & Gamble has a lower business risk profile.

Advantage: Procter & Gamble.

Financial fortitude 

A stock's overall risk profile is also affected by the financial strength of the underlying business. Let's see how Procter & Gamble and Altria stack up in this regard.

Metric

Procter & Gamble

Altria

Revenue

$66.87 billion 

$25.35 billion 

Operating income

$13.62 billion

$9.58 billion

Operating cash flow

$14.80 billion

$7.34 billion

Free cash flow

$11.14 billion

$7.16 billion

Cash

$11.25 billion 

$2.39 billion 

Debt

$31.29 billion

$13.90 billion

Data sources: Morningstar, Yahoo! Finance.

Procter & Gamble and Altria ended their most recent quarters with $20 billion and $11.5 billion in net debt on their balance sheets, respectively. However, Altria's recent investments in Juul and Cronos Group could add as much as $14.6 billion to its debt load.

Moreover, P&G's revenue dwarfs that of Altria. Its operating profit, operating cash flow, and free cash flow production is also significantly greater. Thus, P&G has the edge in terms of financial strength.

Advantage: Procter & Gamble.

Growth

Both P&G and Altria have found revenue growth difficult to come by in recent years. Declining smoking rates, tax increases, and greater regulatory restrictions on tobacco products are all likely to continue to weigh on Altria' sales. Meanwhile, competition from internet-based rivals and private-label brands is likely to remain an ongoing challenge for P&G.

Still, analysts estimate that Altria will grow its earnings per share by 8.6% annually over the next five years, driven mostly by price increases and cost cuts. During this same time, P&G's EPS is projected to rise by 6.6% annually, fueled by low-single-digit sales growth and share repurchases.

Altria, therefore, has a slight edge when it comes to expected earnings growth in the coming years.

Advantage: Altria.

Valuation

Finally, let's review some value metrics, including price-to-free cash flow (P/FCF), price-to-earnings (P/E), and price-to-earnings-to-growth (PEG) ratios.

Metric

Procter & Gamble

Altria

P/FCF

20.41 

12.94 

Trailing P/E

22.52 

12.58 

Forward P/E

19.34 

11.48 

PEG

3.43 

1.47 

Data sources: Morningstar, Yahoo! Finance, FINVIZ.

Altria's stock is significantly less expensive than P&G's per dollar of free cash flow and earnings, both trailing and expected. The pricing disparity is even more pronounced when we account for Altria's higher projected EPS growth, as we do with the PEG ratio; the tobacco titan's shares are 57% cheaper based on this important metric. In turn, Altria's shares are currently the better bargain.

Advantage: Altria.

The better buy: You decide

Each of these two companies has a mix of pros and cons, making the right choice more of a personal decision. Ultimately, you'll need to choose for yourself which of these factors is most important to you. If you're a conservative, risk-averse investor, perhaps Procter & Gamble's lower business risk profile and greater financial strength will appeal to you. If you're a value-focused investor, you may find Altria's more attractively priced stock intriguing. Either way, you'll be investing in a business that should continue to reward you with handsome dividends throughout this current bear market -- and for many years to come.

Check out the latest Procter & Gamble and Altria earnings call transcripts.