Both Philip Morris and Altria sell Marlboro cigarettes. Image source: Nikita2706 via Wikimedia Commons.

Many investors have made the mistake of assuming that the tobacco industry is a dying relic, but as industry giants Philip Morris International (NYSE:PM) and Altria Group (NYSE:MO) have shown, pricing power has overcome volume declines in helping both companies grow admirably. Yet even though the two companies share the Marlboro brand, many investors want to know which stock is a better buy right now. Let's compare Altria and Philip Morris on a number of metrics to see which one looks more attractive under current conditions.

From a share-price perspective, both Philip Morris International and Altria Group did well last year. Altria managed to do a lot better, though, rising 23% versus a 13% total return for Philip Morris.

The greater rise in Altria shares has pushed them to a higher apparent valuation based on earnings. On a trailing basis, Altria currently trades at about 21.5 times earnings, compared to just 18.5 times earnings for Philip Morris. However, when you incorporate expectations for near-term growth into the equation, the valuations look very similar, with both stocks sporting forward multiples between 18 and 19. If you believe that factors like the U.S. dollar's strength will persist and hold back Philip Morris International's global business from performing as well as the domestically focused Altria tobacco business, then Altria looks like a better bet from a valuation standpoint, even despite its higher trailing P/E ratio.

For dividend investors, both Altria and Philip Morris have been consistently strong. In terms of current yield, Philip Morris has a clear edge, with its dividend yield approaching 5% compared to a 3.9% yield for Altria.

However, there are a couple of things to keep in mind. First, Philip Morris pays a higher payout ratio, giving shareholders about 86% of its earnings compared to around 80% for Altria. More important, dividend growth for Philip Morris has slowed considerably. The company only gave shareholders a 2% boost in its payout in 2015, compared to a nearly 9% rise for Altria. Altria's longer history as an independent company also gives it a more impressive track record of dividend growth over time than Philip Morris International, and Altria would qualify for Dividend Aristocrat status had it not been for its spinoffs along the way. Those who need current yield should look to Philip Morris, but in the long run, it's a much closer question.

On a fundamental basis, Altria and Philip Morris have faced very different conditions lately. Altria's most recent quarterly report showed its continuing ability to grow. Revenue net of excise taxes rose 4.7%, and net income rose about 9%. Altria's decisions to boost the prices of its products paid off for the company's top and bottom lines, and cigarette shipment volumes increased very slightly, bucking the longer-term trend of falling volume. Growth from the smokeless tobacco segment as well as wine further helped Altria fare well against its domestic tobacco rivals.

Philip Morris International has had a much tougher time of late, as the strong dollar has dramatically eaten into its results. In its most recent quarter, Philip Morris saw sales plunge 12%, and net income was down around 10% compared to the year-ago period. Yet if you look at the business on a currency-neutral basis, Philip Morris International's growth was stellar. An 18-percentage point swing would have sent adjusted sales up 6% if measured in local currencies, and the dollar cost the company $0.37 in quarterly per-share earnings. Had the company had that extra earnings power at its disposal, it would have been in a much better position to give shareholders more than the $0.02 per share quarterly dividend boost they got in 2015, as well as to reinstate other measures like its stock buyback.

In the end, deciding between Philip Morris International and Altria Group depends on your view of the currency markets. If you think the dollar has come too far too fast and will have to decline in short order, then Philip Morris' raw growth is impressive. But if you think the dollar will stay strong, Altria gives you better protection against the currency headwinds that Philip Morris has faced.