Definitive Analysis
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Universal Corporation (UVV)

Company Dividend Discount ModelIndustry: TobaccoSector: Consumer Defensive

Valuation Snapshot

Stable Growth$63.79 - $115.27$85.28
Multi-Stage$67.74 - $73.95$70.79
Blended Fair Value$78.03
Current Price$55.87
Upside39.67%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS1.12%5.35%3.173.123.083.042.993.002.782.171.981.88
YoY Growth--1.64%1.31%1.25%1.67%-0.25%7.85%27.76%9.78%5.15%0.11%
Dividend Yield--5.44%6.54%6.16%5.02%5.25%7.05%4.52%3.29%3.06%3.26%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)111.64
(-) Cash Dividends Paid (M)69.94
(=) Cash Retained (M)41.71
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)22.3313.968.37
Cash Retained (M)41.7141.7141.71
(-) Cash Required (M)-22.33-13.96-8.37
(=) Excess Retained (M)19.3827.7533.33
(/) Shares Outstanding (M)25.1525.1525.15
(=) Excess Retained per Share0.771.101.33
LTM Dividend per Share2.782.782.78
(+) Excess Retained per Share0.771.101.33
(=) Adjusted Dividend3.553.884.11
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.35%4.35%5.35%
Fair Value$63.79$85.28$115.27
Upside / Downside14.18%52.63%106.32%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)111.64116.50121.56126.84132.35138.11142.25
Payout Ratio62.64%68.11%73.59%79.06%84.53%90.00%92.50%
Projected Dividends (M)69.9479.3589.45100.28111.88124.29131.58

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.35%4.35%5.35%
Year 1 PV (M)72.0472.7373.43
Year 2 PV (M)73.7275.1576.60
Year 3 PV (M)75.0277.2279.47
Year 4 PV (M)75.9978.9782.04
Year 5 PV (M)76.6480.4284.35
PV of Terminal Value (M)1,330.481,396.111,464.30
Equity Value (M)1,703.891,780.611,860.19
Shares Outstanding (M)25.1525.1525.15
Fair Value$67.74$70.79$73.95
Upside / Downside21.24%26.70%32.36%

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