Financial Analysis: RLX Technology (NYSE:RLX) vs. Imperial Tobacco Group (OTCMKTS:IMBBY)

RLX Technology (NYSE:RLX) and Imperial Tobacco Group (OTCMKTS:IMBBY) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Insider and Institutional Ownership

22.7% of RLX Technology shares are owned by institutional investors. Comparatively, 0.0% of Imperial Tobacco Group shares are owned by institutional investors. 53.4% of RLX Technology shares are owned by insiders. Comparatively, 1.0% of Imperial Tobacco Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for RLX Technology and Imperial Tobacco Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLX Technology	0	2	0	0	2.00
Imperial Tobacco Group	0	2	0	0	2.00

RLX Technology presently has a consensus target price of $2.50, indicating a potential upside of 27.88%. Given RLX Technology’s higher possible upside, research analysts clearly believe RLX Technology is more favorable than Imperial Tobacco Group.

Valuation & Earnings

This table compares RLX Technology and Imperial Tobacco Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLX Technology	$566.11 million	5.35	$131.83 million	$0.10	19.55
Imperial Tobacco Group	$42.02 billion	0.65	$2.70 billion	N/A	N/A

Imperial Tobacco Group has higher revenue and earnings than RLX Technology.

Volatility and Risk

RLX Technology has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Imperial Tobacco Group has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500.

Profitability

This table compares RLX Technology and Imperial Tobacco Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLX Technology	20.76%	6.15%	5.60%
Imperial Tobacco Group	N/A	N/A	N/A

Dividends

RLX Technology pays an annual dividend of $0.10 per share and has a dividend yield of 5.1%. Imperial Tobacco Group pays an annual dividend of $2.16 per share and has a dividend yield of 6.1%. RLX Technology pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

RLX Technology beats Imperial Tobacco Group on 8 of the 12 factors compared between the two stocks.

About RLX Technology

RLX Technology Inc., together with its subsidiaries, engages in the manufacture and sale of e-vapor products in the People's Republic of China and internationally. It serves partner distributors and retail outlets. The company was founded in 2018 and is headquartered in Beijing, China.

About Imperial Tobacco Group

Imperial Brands PLC, together with its subsidiaries, manufactures, imports, markets, and sells tobacco and tobacco-related products in Europe, the Americas, Africa, Asia, and Australasia. It offers a range of cigarettes, tobacco accessories, vapour, heated tobacco, and oral nicotine. The company sells its products under various brands, including JPS, Davidoff, Gauloises, West, Winston, Kool, Lambert & Butler, Fortuna, Nobel, News, Backwoods, Champion, Golden Virginia, Rizla, Blu, Pulze, Skruf, and Zone X. In addition, it engages in the distribution of tobacco and NGP products for tobacco and NGP product manufacturers; and various non-tobacco and NGP products and services. Further, the company is involved in the management of a golf course; distribution of pharmaceuticals, POS software, and published materials and other products; printing and publishing activities; and provision of long haul transportation, industrial parcel and express delivery, pharmaceutical products logistics, advertising, payment, and support management services, as well as owns the trademarks; and retails its products. Additionally, it engages in distribution of books; waste management, leaf processing related activities. Furthermore, the company is involved in research and development of e-vapour products. The company was formerly known as Imperial Tobacco Group PLC and changed its name to Imperial Brands PLC in February 2016. Imperial Brands PLC was founded in 1636 and is based in Bristol, the United Kingdom.