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Universal Corporation (UVV)
:UVV
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Universal
(NYSE:UVV)
62Neutral
Universal (UVV) vs. S&P 500 (SPY)
Market Cap
$1.34B
Dividend Yield5.94%
Average Volume (3M)140.38K
Price to Earnings (P/E)10.9
Beta (1Y)0.48
Revenue Growth12.88%
EPS Growth-6.33%
CountryUS
Employees27,000
SectorUtilities
Sector Strength83
IndustryTobacco
Share Statistics
EPS (TTM)4.98
Shares Outstanding24,692,747
10 Day Avg. Volume143,059
30 Day Avg. Volume140,378
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.47
Price to Cash Flow (P/CF)-5.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Universal Business Overview & Revenue Model
Company DescriptionUniversal Corp. engages in the processing, procuring, financing, packing, storing, shipping and trading of leaf tobacco. It operates its business through the following business segments: North America, South America, Africa, Europe, Asia, Dark Air-Cured, Oriental and Special Services. The North America, South America, Africa, Europe, and Asia segments are involved in flue-cured and burley leaf tobacco operations. The Dark Air-Cured segment includes supplying of dark air-cured tobacco to manufacturers of cigars, pipe tobacco, and smokeless tobacco products. The Oriental segment supplies oriental tobacco to cigarette manufacturers. The Special Services segment provides laboratory services, including physical and chemical product testing and smoke testing. The company was founded in 1918 and is headquartered in Richmond, VA.
How the Company Makes MoneyUniversal Corporation makes money primarily through the sale of processed tobacco leaf to cigarette and other tobacco product manufacturers. The company's revenue model hinges on its ability to source high-quality tobacco from growers across various countries, process it to meet manufacturer specifications, and sell it to major tobacco product companies. Universal also benefits from long-term relationships and contracts with large tobacco manufacturers, which provide a stable revenue stream. Additionally, the company may engage in partnerships or joint ventures that enhance its market position and operational efficiency, although specific partnerships are not detailed here. The global demand for tobacco products and the company's pivotal role in the supply chain significantly contribute to its earnings.
Universal Financial Statement Overview
Summary
Universal's financials show a solid income statement with healthy revenue growth and operational efficiency. However, balance sheet metrics indicate rising debt levels, and cash flow poses a concern with negative free cash flow and operational cash flow, potentially impacting future liquidity.Income Statement
Universal's income statement shows a stable gross profit margin, increasing from 17.84% to 19.22% over the past year. Net profit margin has slightly decreased from 4.83% to 4.35%. Revenue growth was healthy at 6.98%, indicating positive sales momentum. EBIT and EBITDA margins are robust at 8.08% and 10.33%, respectively, highlighting efficient operational management.72
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.74, indicating manageable leverage levels. Return on equity (ROE) stands at a decent 8.32%, showing good profitability relative to equity. The equity ratio remains strong at 48.92%, suggesting a well-capitalized position, though the increase in total debt suggests rising financial obligations.65
Positive
Cash Flow
The cash flow statement reveals challenges, with negative free cash flow and operating cash flow figures. Free cash flow growth rate is concerning, declining significantly. The operating cash flow to net income ratio is negative, indicating cash flow issues, but free cash flow to net income ratio is also negative, reflecting cash constraints.48
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.83B | 2.75B | 2.57B | 2.10B | 1.98B | 1.91B | Gross Profit |
| 543.25M | 528.10M | 458.29M | 408.93M | 386.00M | 356.81M | EBIT |
| 223.65M | 222.01M | 181.07M | 160.31M | 147.81M | 126.37M | EBITDA |
| 304.96M | 283.86M | 250.07M | 214.69M | 188.42M | 173.44M | Net Income Common Stockholders |
| 121.79M | 119.60M | 124.05M | 86.58M | 87.41M | 71.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 297.56M | 55.59M | 64.69M | 81.65M | 197.22M | 107.43M | Total Assets |
| 2.13B | 2.94B | 2.64B | 2.59B | 2.34B | 2.12B | Total Debt |
| 422.53M | 1.06B | 849.32M | 741.11M | 647.09M | 482.51M | Net Debt |
| 124.97M | 1.01B | 784.63M | 659.46M | 449.87M | 375.08M | Total Liabilities |
| 753.31M | 1.46B | 1.20B | 1.20B | 993.50M | 831.64M | Stockholders Equity |
| 1.34B | 1.44B | 1.40B | 1.34B | 1.31B | 1.25B |
| Cash Flow | Free Cash Flow | ||||
| -103.99M | -140.65M | -65.23M | -8.32M | 154.26M | -24.33M | Operating Cash Flow |
| -33.19M | -74.63M | -10.56M | 44.88M | 220.41M | 10.90M | Investing Cash Flow |
| -64.25M | -60.00M | -50.35M | -142.66M | -217.27M | -106.36M | Financing Cash Flow |
| 119.08M | 125.67M | 38.95M | -16.76M | 91.39M | -94.15M |
Universal Technical Analysis
Positive
54.25
Price Trends
52.75
Positive
52.89
Positive
50.83
Positive
Market Momentum
0.37
Negative
56.63
Neutral
67.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UVV, the sentiment is Positive. The current price of 54.25 is above the 20-day moving average (MA) of 53.57, above the 50-day MA of 52.75, and above the 200-day MA of 50.83, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 56.63 is Neutral, neither overbought nor oversold. The STOCH value of 67.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UVV.
Universal Risk Analysis
Universal disclosed 24 risk factors in its most recent earnings report. Universal reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Universal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $29.66B | 9.36 | 45.38% | 5.26% | 5.61% | 23.39% | |
72 Outperform | $98.31B | 9.02 | -503.31% | 6.88% | -0.28% | 43.51% | |
67 Neutral | $236.49B | 33.31 | -37142.11% | 3.48% | 7.75% | -9.85% | |
65 Neutral | $11.99B | 15.63 | 6.50% | 4.40% | 7.00% | 0.55% | |
62 Neutral | $1.34B | 10.91 | 8.32% | 5.94% | 12.88% | -6.33% | |
61 Neutral | $89.63B | 23.22 | 5.87% | 7.25% | -2.51% | ― | |
61 Neutral | $1.05B | 27.37 | 27.80% | 0.47% | -0.13% | 2.92% |
* Utilities Sector Average
Performance Comparison
UVV
Universal
53.56
5.90
12.38%
MO
Altria Group
57.81
17.89
44.81%
BTI
British American Tobacco
41.36
13.08
46.25%
PM
Philip Morris
151.32
60.55
66.71%
IMBBY
Imperial Brands
35.49
14.36
67.96%
TPB
Turning Point Brands
59.25
31.63
114.52%
Universal Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 3.53% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong start for Universal Corporation in fiscal year 2025, with significant revenue and income growth in both the Tobacco and Ingredients segments. The company is well-positioned despite challenges with elevated debt levels and logistics issues. The successful sustainability initiatives and ongoing projects like the Lancaster expansion further reinforce positive prospects.Highlights
Strong Start to Fiscal Year 2025
Universal Corporation's revenue for Q1 2025 was $597.1 million, up 15% for both Tobacco and Ingredient Operations segments. Operating income was $17.2 million, up 56% compared to the same quarter last fiscal year.
Tobacco Operations Segment Performance
Operating income for the Tobacco Operations segment increased by $5.6 million to $14.5 million for Q1 2025 compared to the same quarter last year, driven by higher sales volumes and prices.
Ingredients Operations Segment Growth
Operating income for the Ingredients Operations segment was up $4.9 million for Q1 2025 due to increased sales volumes, higher sales of new products, and recovery of demand for core products.
Successful Sustainability Initiatives
Universal received independent third-party verification for Scope 1, 2, and 3 emissions data, reinforcing their commitment to sustainability and transparent disclosure.
Lancaster Expansion Project on Track
The processing lines for the Lancaster, Pennsylvania expansion project are progressing well, with the facility expected to be fully operational in the second half of the fiscal year.
Lowlights
Elevated Debt Levels
As of June 30, 2024, debt levels remained elevated due to committed tobacco inventory, with the expectation of working capital unwinding during fiscal year 2025.
Unfavorable Foreign Currency Impact
Selling, general, and administrative expenses were up $3.2 million in Q1 2025, largely due to unfavorable foreign currency comparisons.
Logistic Challenges
Increased freight and logistics costs were noted, particularly due to geopolitical tensions affecting container availability.
Company Guidance
In the UVV Q1 2025 earnings call, Universal Corporation reported a strong start to the fiscal year with revenue reaching $597.1 million for the quarter ended June 30, 2024, marking a 15% growth in both the Tobacco and Ingredient Operations segments. Operating income also saw a significant increase, rising by 56% to $17.2 million. The Tobacco Operations segment witnessed improved performance due to higher sales volumes and prices, with operating income up by $5.6 million to $14.5 million, driven by carryover crop shipments and earnings from an oriental tobacco joint venture. The Ingredients Operations segment also experienced a boost with operating income increasing by $4.9 million, attributed to higher sales volumes, particularly in new products and core products like fruit juices. The company maintained a low uncommitted tobacco inventory level of 13% and expects recent elevated green tobacco prices to encourage more planting, potentially balancing the market in the future. Additionally, debt levels remained high due to committed tobacco inventory, but the company anticipates a reduction in working capital as inventory is processed and delivered. Sustainability efforts remain a focus, with independent verification of greenhouse gas emissions data reinforcing their commitment to environmental goals.Universal Corporate Events
Delistings and Listing ChangesRegulatory Filings and Compliance
Universal Faces NYSE Compliance and Reporting Challenges
Negative
Nov 22, 2024
Universal Corporation is facing compliance challenges with the NYSE due to delays in filing its quarterly financial report, triggered by an ongoing internal investigation. The company, while committed to resolving the issues, acknowledges the risk of potential delisting if deadlines aren’t met. Despite these hurdles, Universal aims to file the necessary documents within the allocated six-month period, ensuring transparency and adherence to reporting obligations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.