Universal Corp., known by the ticker symbol UVV, is a small cap tobacco company in the consumer defensive business sector. This is my first report on UVV for my Viital stock portfolio It was the nineteenth selection for my Vista portfolio number 5 as of January 15, this year.

Universal Corp. is a global leaf tobacco supplier. The company procures leaf tobacco from farmers, processes it, and sells it to companies that manufacture consumer tobacco products. 

Universal does not manufacture or sell any consumer products itself. More than 15% of total company revenue comes from the North America segment, which sells cigarette tobacco in North America. 

Approximately three quarters of revenue is from the Other Regions segment, which sells cigarette tobacco outside North America. 

Image source: Pixabay

The remainder of company revenue is from the Other Tobacco Operations segment, which sells dark air-cured tobacco (used primarily in cigar, pipe, and smokeless products), oriental tobacco, and services worldwide.

Further, it provides various value-added manufacturing processes to produce specialty vegetable and fruit-based ingredients for the food and beverage end markets, 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.

Three key data points gauge any dividend equity or fund such as Universal Corp. (UVV):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

UVV Price

Universal's price per share was $49.66 as of yesterday's market close. One year ago its price was $45.14. So, UVV's share price increased just over 10% in the past year.

If Universal's stock trades in the range of $42.00 to $60.00 this next year, its recent $49.66 price could rise by $4.34 to reach $54.00 by November 15, 2022. My estimate is just pennies below the annual price increase managed by UVV In the past year.

UVV Dividends

Universal's most recently announced quarterly dividend of  $0.78 will pay out February 7th, to shareholders of record on January 7th. The compounded annual payout of $3.12 yields 6.28% based on yesterday's $49.66 closing price. UVV has paid quarterly dividends increasing generally annually since August 1985: That was 36 years of increasing payouts as of last August. 

UVV Returns

Adding the $3.12 annual estimated UVV forward-looking dividend to my $4.34 price upside estimate shows a $7.46 potential gross gain, per share, to be reduced by any costs to trade UVV shares.  

At yesterday's $49.66 price per share, a little under $1000 would buy 20 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us $0.50 per share.

Subtract that maybe $0.50 brokerage cost from my estimated $7.46 gross gain per share results in a net gain of $6.96 X 20 shares = $139.20 for a 13.92% net gain on a $993.20 investment.

So it is that Universal Corp. (UVV) shows a possible 13.92% net gain including a 6.28% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Universal Corp. (UVV) could generate $60.82 in cash dividends alone. Note that a single share of UVV bought at yesterday's closing price was $49.66! Thus, Universal Corp share price is $11.16 less than the dividend income from $1000.00 invested. Thus, according to my dogcatcher ideal, now is a prime time to pick up UVV shares. The estimated next-year dividend from $1k invested is over $11 greater than the single share price. Consider yourself alerted. It's a sign!  

All of the estimates above are speculation based on the past history of Universal Corp. (UVV). Only time and money invested in this stock will determine its market value.