Image source: Altria Group.

Tobacco stocks have performed extremely well over the years, and Altria Group (NYSE:MO) and Philip Morris International (NYSE:PM) are both giants in the industry. Even though the two companies share a common history, they have dramatically different markets that they serve, and that raises the obvious question of whether Philip Morris or Altria is the better buy right now. Let's take a closer look at Altria Group and Philip Morris International, comparing them on a number of metrics to see which one looks more attractive under current conditions.

Both Altria and Philip Morris have seen strong gains over the past 12 months. Since March 2015, Philip Morris stock has climbed 29%, topping out Altria's 23% total return.

Typically, you'd expect that because Philip Morris stock has picked up more ground, its valuation might be higher than Altria. Yet using some of the simplest valuation metrics, the two stocks present a mixed picture. When you look at trailing earnings, Altria looks slightly more expensive than Philip Morris, sporting an earnings multiple of 23 versus 22 for the international tobacco giant. But when you incorporate forward earnings expectations, Philip Morris is a bit more richly valued, at 20 times forward earnings compared to 18 for Altria. Those figures are close enough to each other that it's hard to declare a winner based on valuation alone.

Dividend investors typically point to current yield, and the recent rise in Philip Morris shares has narrowed its yield advantage over Altria from where it was just a few months ago. Philip Morris now carries a yield of about 4.2%, compared to 3.7% for Altria. That's still significant, but the spread is only about half as big as it was even in January.

There's reason to think that the dividend yield advantage for Philip Morris could shrink even further. The international tobacco company has seen its dividend growth slow dramatically, but Altria has continued to ride strength in the domestic tobacco market to produce stronger gains. Some signs of a pause in the U.S. dollar's strength might finally encourage Philip Morris to loosen its purse strings, but its payout ratio based on earnings is higher than Altria's as well. The advantages for Philip Morris in current yield get offset almost perfectly by the arguably greater potential for dividend growth from Altria, and that makes the two stocks look like a toss-up on the dividend front as well.

Altria and Philip Morris have growth prospects that reflect their different markets. Altria's full-year 2015 results included 9% growth in adjusted earnings per share, with strength across the board. Smokeable products revenues rose by more than 5% net of excise tax, and that produced operating company income gains of more than 10%. Smokeless products weighed in with 5% gains in adjusted operating company income, and the wine segment enjoyed a 13% growth rate. Altria's outlook for 2016 was also favorable, with expectations for 7% to 9% growth in adjusted earnings per share being consistent with past results.

Philip Morris, on the other hand, saw continuing pressure on the currency front. Net revenue excluding excise tax plunged 10%, and adjusted earnings per share fell 12%. Yet the dollar's impact hid underlying fundamental growth, and Philip Morris said that after adjusting for currency impacts, earnings per share would have risen 12%, and revenue would have climbed by almost 6%. Moreover, Philip Morris expects further currency hits in 2016, projecting further earnings declines even though it thinks that currency-neutral earnings per share would actually rise 10% to 12%.

With Philip Morris and Altria going neck and neck in valuation and dividends, the key element is which can grow faster. If the dollar's strength wanes, then underlying strength for Philip Morris could produce greater gains. If global markets remain challenging, then Altria will be the better bet for now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.