NYSE:UVV

Stock Analysis Report

Executive Summary

Universal Corporation engages in the supply of leaf tobacco products worldwide.


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Universal's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UVV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.2%

UVV

-0.5%

US Tobacco

0.6%

US Market


1 Year Return

-1.9%

UVV

13.4%

US Tobacco

24.6%

US Market

Return vs Industry: UVV underperformed the US Tobacco industry which returned 5.7% over the past year.

Return vs Market: UVV underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

UVVIndustryMarket
7 Day-3.2%-0.5%0.6%
30 Day-2.3%-1.0%3.0%
90 Day-0.9%8.5%10.6%
1 Year3.4%-1.9%20.9%13.4%27.3%24.6%
3 Year-19.5%-29.7%-15.9%-27.8%50.5%40.8%
5 Year67.4%35.4%19.4%-5.1%78.9%59.1%

Price Volatility Vs. Market

How volatile is Universal's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Universal undervalued compared to its fair value and its price relative to the market?

22.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UVV ($55.35) is trading below our estimate of fair value ($69.85)

Significantly Below Fair Value: UVV is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: UVV is good value based on its PE Ratio (15.7x) compared to the Tobacco industry average (15.9x).

PE vs Market: UVV is good value based on its PE Ratio (15.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate UVV's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: UVV is good value based on its PB Ratio (1.1x) compared to the US Tobacco industry average (3.7x).


Next Steps

Future Growth

How is Universal forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

9.8%

Forecasted Food, Beverage & Tobacco industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Universal has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Universal performed over the past 5 years?

2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UVV has high quality earnings.

Growing Profit Margin: UVV's current net profit margins (4.3%) are lower than last year (5.5%).


Past Earnings Growth Analysis

Earnings Trend: UVV's earnings have grown by 2.2% per year over the past 5 years.

Accelerating Growth: UVV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: UVV had negative earnings growth (-25.6%) over the past year, making it difficult to compare to the Tobacco industry average (-1.7%).


Return on Equity

High ROE: UVV's Return on Equity (7.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Universal's financial position?


Financial Position Analysis

Short Term Liabilities: UVV's short term assets ($1.6B) exceed its short term liabilities ($352.4M).

Long Term Liabilities: UVV's short term assets ($1.6B) exceed its long term liabilities ($527.2M).


Debt to Equity History and Analysis

Debt Level: UVV's debt to equity ratio (40.7%) is considered high.

Reducing Debt: UVV's debt to equity ratio has reduced from 51.2% to 40.7% over the past 5 years.

Debt Coverage: UVV's debt is not well covered by operating cash flow (17.9%).

Interest Coverage: UVV's interest payments on its debt are well covered by EBIT (10.5x coverage).


Balance Sheet

Inventory Level: UVV has a high level of physical assets or inventory.

Debt Coverage by Assets: UVV's debt is covered by short term assets (assets are 3x debt).


Next Steps

Dividend

What is Universal's current dividend yield, its reliability and sustainability?

5.61%

Current Dividend Yield


Dividend Yield vs Market

company5.6%marketbottom25%1.4%markettop25%3.7%industryaverage5.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: UVV's dividend (5.49%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: UVV's dividend (5.49%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: UVV's dividends per share have been stable in the past 10 years.

Growing Dividend: UVV's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (84.7%), UVV's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Universal's salary, the management and board of directors tenure and is there insider trading?

8.3yrs

Average management tenure


CEO

George Freeman (56yo)

11.8yrs

Tenure

US$5,346,387

Compensation

Mr. George C. Freeman, III, has been Chairman of Universal Corporation since August 5, 2008. Mr. Freeman has been Chief Executive Officer of Universal Corporation since April 1, 2008. Mr. Freeman has been  ...


CEO Compensation Analysis

Compensation vs Market: George's total compensation ($USD5.35M) is above average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: George's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

8.3yrs

Average Tenure

53.5yo

Average Age

Experienced Management: UVV's management team is seasoned and experienced (8.3 years average tenure).


Board Age and Tenure

7.2yrs

Average Tenure

66yo

Average Age

Experienced Board: UVV's board of directors are considered experienced (7.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$296,22714 Jun 19
Theodore Broome
EntityIndividual
Role
Senior Key Executive
Executive VP & Sales Director of Universal Leaf Tobacco Company Inc
Shares5,000
Max PriceUS$59.25
SellUS$105,57312 Jun 19
James Huffman
EntityIndividual
Shares1,745
Max PriceUS$60.50
SellUS$106,32031 May 19
James Huffman
EntityIndividual
Shares1,862
Max PriceUS$57.10
SellUS$140,62331 May 19
Preston Wigner
EntityIndividual
Role
Chief Legal Officer
VP, General Counsel & Secretary
Shares2,500
Max PriceUS$56.25
SellUS$433,25306 Mar 19
Robert Peebles
EntityIndividual
Shares7,274
Max PriceUS$59.56
SellUS$135,52206 Mar 19
James Huffman
EntityIndividual
Shares2,277
Max PriceUS$59.52

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • George Freeman (56yo)

    Chairman

    • Tenure: 11.8yrs
    • Compensation: US$5.35m
  • Preston Wigner (50yo)

    VP, General Counsel & Secretary

    • Tenure: 14.2yrs
    • Compensation: US$1.48m
  • Theodore Broome (65yo)

    Executive VP & Sales Director of Universal Leaf Tobacco Company Inc

    • Tenure: 8.8yrs
    • Compensation: US$1.50m
  • Candace Formacek (59yo)

    VP & Treasurer

    • Tenure: 7.8yrs
  • Airton Hentschke (49yo)

    COO & Senior VP

    • Tenure: 4.8yrs
    • Compensation: US$2.50m
  • Johan Kroner (51yo)

    Senior VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$1.09m
  • C. Claiborne (58yo)

    VP & Assistant Secretary

    • Tenure: 19yrs
  • Scott Bleicher (41yo)

    VP & Controller

    • Tenure: 0.6yrs

Board Members

  • Tom Johnson (69yo)

    Independent Director

    • Tenure: 19yrs
    • Compensation: US$187.38k
  • Bob Sledd (66yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$189.88k
  • Lennart Freeman (68yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$189.88k
  • Eddie Moore (71yo)

    Lead Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$208.63k
  • George Freeman (56yo)

    Chairman

    • Tenure: 11.8yrs
    • Compensation: US$5.35m
  • Thomas Tullidge

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: US$148.63k
  • Diana Cantor (61yo)

    Independent Director

    • Tenure: 8yrs
    • Compensation: US$187.38k
  • Mike Lawton (60yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$188.63k

Company Information

Universal Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Universal Corporation
  • Ticker: UVV
  • Exchange: NYSE
  • Founded: 1886
  • Industry: Tobacco
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$1.344b
  • Shares outstanding: 24.80m
  • Website: https://www.universalcorp.com

Number of Employees


Location

  • Universal Corporation
  • 9201 Forest Hill Avenue
  • Richmond
  • Virginia
  • 23235
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UVVNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
UVVDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0LJDLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968

Biography

Universal Corporation engages in the supply of leaf tobacco products worldwide. The company operates through North America, South America, Africa, Europe, Asia, Dark Air-Cured, Oriental, and Special Services segments. It is involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to manufacturers of consumer tobacco products. The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes; and dark air-cured tobaccos principally used in the manufacture of cigars, natural wrapped cigars and cigarillos, smokeless, and pipe tobacco products. It also provides value-added services, including blending, chemical, and physical testing of tobacco; service cutting for various manufacturers; manufacturing reconstituted leaf tobacco; just-in-time inventory management services; electronic nicotine delivery systems; e-liquid testing services; and smoke testing services for customers. In addition, the company offers testing services for crop protection agents and tobacco constituents in seed, leaf, and finished products, including e-cigarette liquids and vapors; and analytical services that include chemical compound testing in finished tobacco products and mainstream smoke, as well as engages in the research and development growth trials with various partners for non-tobacco agriproducts production, such as vanilla. Further, it produces and sells dehydrated and juiced fruit and vegetable products, as well as provides water pipe style leaf tobacco; and recycles waste materials from tobacco production. The company was founded in 1886 and is headquartered in Richmond, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/22 23:47
End of Day Share Price2020/01/22 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.