Breaking Down Universal Corporation (UVV) Financial Health: Key Insights for Investors

Are you keeping a close eye on your investments and looking for stable, dividend-paying stocks? Have you considered Universal Corporation (UVV)? With a dividend yield (trailing) of 6.27% and a forward dividend yield of 6.27%, it might catch your eye. But before you jump in, let's dissect the company's financial health. Did you know that in the fiscal year 2024, Universal reported $2.7 billion in consolidated revenues, a $178.7 million increase from fiscal year 2023? What does this revenue growth mean for its long-term stability and potential returns? Stick around as we explore key insights into Universal Corporation's financial performance, helping you make informed decisions.

Universal Corporation (UVV) Revenue Analysis

Universal Corporation (UVV) operates primarily as a global leaf tobacco merchant and processor. The company procures, processes, and finances leaf tobacco, acting as an intermediary between tobacco farmers and manufacturers of consumer products like cigarettes, cigars, and smokeless tobacco.

Analyzing Universal Corporation's financial health requires a close look at its revenue streams. These revenues are substantially influenced by tobacco market dynamics, crop yields, and global demand. Investors should monitor these factors to understand UVV's performance.

Here’s a breakdown of what to consider:

• Primary Revenue Sources: The core of UVV's revenue comes from processing and selling leaf tobacco.
• Geographic Revenue: UVV generates revenue from operations in various regions worldwide.

To provide a clearer picture, let's consider some key aspects of Universal Corporation's revenue:

Year-over-Year Revenue Growth: Reviewing historical trends in revenue growth is essential. While specific percentage increases or decreases fluctuate annually, these trends provide insights into the company's ability to adapt to market changes.

Segment Contributions: Understanding how different business segments contribute to overall revenue is crucial. For Universal Corporation, this primarily involves assessing revenue contributions from various tobacco types and geographical markets.

Significant Changes in Revenue Streams: Investors should be aware of any notable shifts in UVV's revenue streams. These could arise from new contracts, changes in market demand, or strategic shifts in the company's operations. Monitoring these changes helps in assessing the company's adaptability and future prospects.

For additional insights into the company's goals and values, see Mission Statement, Vision, & Core Values of Universal Corporation (UVV).

Universal Corporation (UVV) Profitability Metrics

Understanding Universal Corporation's profitability involves analyzing several key metrics that reveal how efficiently the company generates profits from its revenue and assets. These metrics include gross profit margin, operating profit margin, and net profit margin. Here's a detailed look:

Gross Profit Margin:

• Definition: Gross profit margin is a financial metric that calculates the proportion of revenue that exceeds the cost of goods sold (COGS). It shows how efficiently a company manages its production or procurement and sales processes.
• TTM (Trailing Twelve Months): For the period ending June 30, 2024, Universal Corporation's gross profit margin was 19.21%, a 9.78% year-over-year change.
• Latest Data: The gross profit margin for the latest twelve months is 19.7%.
• Historical Average: Over the past five fiscal years (2020-2024), the gross profit margin averaged around 19.3%, with a median of 19.6%.
• Trend: The gross profit margin peaked in March 2022 at 20.0% and hit a low of 18.3% in March 2023. There was a decrease in 2023 (18.3%, down 8.5%) and increases in 2020 (18.7%, up 2.3%), 2021 (19.6%, up 4.9%), 2022 (20.0%, up 1.8%), and 2024 (19.9%, up 9.2%).

Operating Profit Margin:

• Definition: Operating margin, also known as operating income margin or return on sales (ROS), is the ratio of operating income divided by net sales or revenue. It indicates how much profit a company makes from its operations before interest and taxes.
• Calculation: For the fiscal year ended March 2024, Universal's operating margin was 8.21% (Operating Income of $225.532 million / Revenue of $2748.573 million).
• Recent Quarter: For the quarter ended June 2024, the operating margin was 2.89% (Operating Income of $17.225 million / Revenue of $597.05 million).
• 5-Year Average Growth Rate: The 5-year average operating margin growth rate was 0.00% per year.

Net Profit Margin:

• Definition: Net profit margin is the ratio of net income to revenue. It measures how much net profit a company obtains for each dollar of revenue.
• Latest Data: Universal's latest twelve months net income to common margin is 5.0%.
• Historical Average: The net income to common margin for fiscal years ending March 2019 to 2023 averaged 4.4%.
• Trend: The net income to common margin peaked in December 2023 at 5.0% and hit a 5-year low in March 2020 of 3.8%. Decreases were seen in 2019 (4.7%, down 10.0%), 2020 (3.8%, down 19.7%), and 2022 (4.1%, down 6.6%), while increases occurred in 2021 (4.4%, up 17.4%) and 2023 (4.8%, up 17.3%).
• Recent Quarter Performance: For the first quarter of 2024, the net profit margin was -0.47%, with a net loss of $2.82 million.

Comparison with Industry Averages:

• Gross Profit Margin: The average gross profit margin in the consumer staples sector is 31.7%, with a standard deviation of 19.9%. Universal Corporation's gross profit margin of 19.7% ranks in the 26.9% percentile for the sector.

Operational Efficiency:

• Cost Management: Universal Corporation demonstrates strategic financial discipline through effective operational cost management and controlled expense structures.
• Operating Expenses: Operating expenses were reported as $269.8 million.
• Cost of Goods Sold (COGS): For the fiscal year ending March 31, 2024, the Cost of Goods Sold was $2.21 billion.

Additional Insights:

• Profitability Rank: Universal has a GuruFocus Profitability Rank of 7, indicating robust and sustainable profit generation.
• Revenue Growth: For the quarter ended June 30, 2024, revenue increased by approximately 15% for both the Tobacco and Ingredients Operations segments.
• Strategic Decisions: Strategic decisions to accelerate tobacco crop purchasing have positioned the company well to meet customer demand, contributing to solid results in fiscal year 2024 and expected continued support in fiscal year 2025.

In summary, while Universal Corporation exhibits fluctuating profitability metrics, its strategic cost management and strong demand for tobacco products support its financial health. Investors should monitor these trends to assess the company's ability to maintain and improve its profitability over time.

Read more about Universal Corporation (UVV) on our blog: Exploring Universal Corporation (UVV) Investor Profile: Who’s Buying and Why?

Universal Corporation (UVV) Debt vs. Equity Structure

Understanding how Universal Corporation (UVV) manages its debt and equity is crucial for assessing its financial strategy and risk profile. This involves looking at the levels of debt the company holds, how it compares to its equity, and recent activities that might impact its financial health. For additional insights, you might find this resource helpful: Breaking Down Universal Corporation (UVV) Financial Health: Key Insights for Investors

Here's a breakdown:

Overview of Universal Corporation's Debt Levels

As of the fiscal year ending March 31, 2024, Universal Corporation's financial structure included both short-term and long-term debt. The long-term debt was reported at $828.1 million, while the short-term debt amounted to $32.5 million.

Debt-to-Equity Ratio and Industry Comparison

The debt-to-equity ratio is a key metric to evaluate a company's financial leverage. As of March 2024, Universal Corporation's debt-to-equity ratio stood at 1.15. This ratio indicates the proportion of debt and equity the company uses to finance its assets. When compared to industry standards, it's important to consider the specific characteristics of the tobacco industry, which may have different norms due to its stable demand and cash flow patterns.

Recent Debt Issuances, Credit Ratings, or Refinancing Activity

Information on Universal Corporation's recent credit ratings and refinancing activities can provide insights into its financial stability and borrowing costs. However, specific details on recent debt issuances or credit rating changes were not available in the provided search results as of April 2025. For the most up-to-date details, consulting Universal Corporation's investor relations or financial news outlets is recommended.

Balancing Debt and Equity

Universal Corporation strategically uses a mix of debt and equity to fund its operations and growth. The balance between these two is crucial for maintaining financial flexibility and minimizing risk. Here are some considerations:

• Cost of Capital: Debt is often cheaper due to the tax deductibility of interest payments.
• Financial Risk: Higher debt levels increase financial risk, especially during economic downturns.
• Flexibility: Equity financing provides more flexibility as it does not require fixed payments.

Analyzing these elements helps investors understand Universal Corporation's financial strategy and its potential impact on the company's performance.

Universal Corporation (UVV) Liquidity and Solvency

Understanding a company's liquidity and solvency is crucial for investors. These metrics provide insights into Universal Corporation's ability to meet its short-term obligations and long-term financial stability. Let's delve into UVV's financial health, focusing on key liquidity ratios, working capital, and cash flow trends.

Assessing Universal Corporation's Liquidity:

Liquidity ratios help gauge UVV's ability to cover its immediate liabilities. Key ratios to consider include the current ratio and the quick ratio.

• Current Ratio: The current ratio measures a company's ability to pay off its current liabilities with its current assets. As of fiscal year 2024, UVV's current ratio can be calculated using the latest balance sheet data. A ratio above 1 generally indicates good liquidity.
• Quick Ratio: Also known as the acid-test ratio, the quick ratio excludes inventory from current assets, providing a more conservative measure of liquidity. For UVV, this ratio offers insight into their ability to meet short-term obligations without relying on the sale of inventory.

Analysis of Working Capital Trends:

Working capital, defined as current assets minus current liabilities, is a vital sign of a company's operational efficiency and short-term financial health. Monitoring the trends in UVV's working capital can reveal whether the company is efficiently managing its resources. An increase in working capital typically suggests improved liquidity, while a decrease might signal potential challenges.

Cash Flow Statements Overview:

Analyzing UVV's cash flow statements provides a comprehensive view of the company's financial activities. The cash flow statement is divided into three main sections:

• Operating Activities: This section reflects the cash generated from UVV's core business operations. Trends in operating cash flow indicate the company's ability to generate cash from its primary activities.
• Investing Activities: This includes cash flow related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). Monitoring investing activities can provide insights into UVV's capital expenditures and strategic investments.
• Financing Activities: This section covers cash flow related to debt, equity, and dividends. Analyzing financing activities helps investors understand how UVV is funding its operations and managing its capital structure.

Here is a sample table illustrating how cash flow data might be organized and analyzed:

Potential Liquidity Concerns or Strengths:

By evaluating the aforementioned metrics, investors can identify potential liquidity concerns or strengths for Universal Corporation. For instance, consistently positive operating cash flow and a healthy current ratio would indicate strong liquidity. Conversely, declining working capital and negative trends in operating cash flow might raise concerns about UVV's ability to meet its short-term obligations.

For further insights into Universal Corporation's investor profile, consider exploring: Exploring Universal Corporation (UVV) Investor Profile: Who’s Buying and Why?

Universal Corporation (UVV) Valuation Analysis

Determining whether Universal Corporation (UVV) is overvalued or undervalued involves analyzing several key financial ratios and indicators. Here's a breakdown:

Price-to-earnings (P/E) Ratio:

• As of April 3, 2025, the P/E ratio for Universal Corp (UVV) is 11.17.
• This is slightly higher than its 12-month average P/E ratio of 10.83, indicating a potential for strong future earnings growth expectations.
• The P/E ratio for the fiscal quarter ending in June 2024 was reported as 10.08.
• For the year 2024, the P/E ratio was 10.75, calculated with a stock price of $51.72 and EPS of $4.81.
• Compared to its peers, UVV's P/E ratio is lower than Philip Morris International Inc (PM) at 33.45 but higher than Altria Group Inc (MO) at 8.81 as of March 24, 2025.

Price-to-book (P/B) Ratio:

• As of March 11, 2025, Universal's share price is $54.25, and the book value per share for the quarter that ended in June 2024 was $57.28.
• The P/B ratio is calculated as 0.98.
• The P/B ratio has shown fluctuations over the years, averaging 1.0x from fiscal years 2020 to 2024.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

• As of March 28, 2025, the EV/EBITDA ratio is 4.76.
• This is based on an enterprise value of $1.39 billion (USD) and TTM EBITDA of $292.68 million (USD).
• For the trailing twelve months (TTM) ending in June 2024, the EV/EBITDA was 12.22 when EBITDA was $208 million.
• Historically, the EV/EBITDA ratio has ranged from a minimum of 6.48 to a maximum of 12.99 over the past 13 years.

Stock Price Trends:

• Over the last 12 months, the stock price rose by 2.30%.
• The 52 Week High is $59.13, and the 52 Week Low is $45.19.
• Recent stock information shows the price at $50.84 with a volume of 185,373 as of April 16, 2025.

Dividend Yield and Payout Ratios:

• The current dividend yield is approximately 6.27% to 6.36%.
• The annual dividend is $3.24 per share.
• The dividend payout ratio for the three months ended in June 2024 was 81.00%.
• The dividend payout ratio has varied over the past 10 years, with a median of 0.63.

Analyst Consensus:

• As of April 4, 2025, there are no analyst ratings available for Universal Corporation.
• Based on 0 analysts, there are no buy, hold, or sell ratings.

Here is a summary table of valuation ratios for Universal Corporation (UVV):

For more insights into Universal Corporation, you might find this resource helpful: Exploring Universal Corporation (UVV) Investor Profile: Who’s Buying and Why?

Universal Corporation (UVV) Risk Factors

Universal Corporation (UVV) faces a variety of risks that could significantly impact its financial health. These risks stem from both internal operational challenges and external market dynamics. Understanding these potential pitfalls is crucial for investors.

Several factors contribute to the risks Universal Corporation faces:

• Industry Competition: The tobacco industry is highly competitive, with numerous players vying for market share. This competition can lead to pricing pressures and reduced profitability for Universal Corporation.
• Regulatory Changes: Regulations surrounding tobacco production and sales are constantly evolving. Changes in these regulations, such as increased taxes or stricter marketing rules, could adversely affect Universal Corporation's business.
• Market Conditions: Shifts in consumer preferences, such as a decline in smoking rates, can significantly impact the demand for tobacco products. Economic downturns can also affect consumer spending on tobacco, impacting Universal Corporation's revenue.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. Here's a breakdown:

Operational Risks:

One significant operational risk involves supply chain disruptions. Events such as natural disasters, political instability, or logistical challenges in key tobacco-growing regions can disrupt the supply of raw materials, impacting production and increasing costs.

Financial Risks:

Universal Corporation's financial health is also subject to risks related to currency fluctuations. As a global company, it conducts business in numerous countries, exposing it to potential losses from changes in exchange rates. Additionally, interest rate fluctuations can impact the cost of borrowing, affecting profitability.

Strategic Risks:

A key strategic risk is the company's ability to adapt to changing consumer preferences and market trends. The rise of alternative nicotine products, such as e-cigarettes and heated tobacco, poses a challenge to traditional tobacco businesses. Universal Corporation must innovate and diversify its product offerings to remain competitive.

While specific mitigation strategies are not always detailed in public filings, Universal Corporation employs several approaches to manage these risks. Diversification of sourcing helps mitigate supply chain disruptions. The company also uses hedging strategies to minimize the impact of currency and interest rate fluctuations. Furthermore, investments in research and development aim to create new products that align with evolving consumer preferences.

For more insights into Universal Corporation and its investors, check out: Exploring Universal Corporation (UVV) Investor Profile: Who’s Buying and Why?

Universal Corporation (UVV) Growth Opportunities

To assess Universal Corporation's (UVV) financial health and future growth prospects, several key factors should be considered. These include growth drivers, revenue projections, strategic initiatives, and competitive advantages. For further insights into UVV's financial health, you can explore this analysis: Breaking Down Universal Corporation (UVV) Financial Health: Key Insights for Investors.

Analyzing Universal Corporation's potential growth drivers involves considering several elements:

• Product Innovations: Examining any new technologies, products, or services UVV is developing or planning to introduce.
• Market Expansions: Evaluating opportunities for UVV to enter new geographic markets or expand its presence in existing ones.
• Acquisitions: Assessing potential or completed acquisitions that could broaden UVV's portfolio or market reach.

Future revenue growth projections and earnings estimates provide a quantitative outlook. While specific figures require up-to-date financial analysis, it's essential to monitor analyst forecasts and company guidance regarding expected revenue growth rates and earnings per share (EPS). These estimates often reflect anticipated market conditions, company-specific initiatives, and broader economic trends.

Strategic initiatives and partnerships can significantly influence future growth. These may include:

• New Partnerships: Collaborations with other companies that could lead to new market opportunities or product offerings.
• Technological Investments: Investments in technology aimed at improving efficiency, reducing costs, or creating new revenue streams.
• Sustainability Initiatives: Efforts to enhance sustainability practices, which can attract environmentally conscious customers and investors.

A company's competitive advantages are crucial for sustained growth. For Universal Corporation, these advantages might include:

• Market Position: A strong foothold in key markets.
• Supply Chain Efficiencies: Efficient supply chain management that reduces costs and improves delivery times.
• Customer Relationships: Strong relationships with key customers that ensure repeat business.

To provide a clearer picture, consider a hypothetical projection based on available information and industry trends. Please note that these figures are speculative and for illustrative purposes only.

These projections depend on various factors, including market conditions, successful implementation of strategic initiatives, and overall economic stability. Continuous monitoring and analysis are essential for making informed investment decisions.