One-glance verdict
Undervalued
$62.96 our estimate vs market $37.95
Wall Street consensus: $60.00 (-4.7% lower than our fair-value estimate)
40% below our estimate, below the bear case
Fundamentals snapshot
Universal Corporation
UVV · NYQ · Consumer Defensive · Tobacco
Current price
$37.95
52-week range
$37.38 - $59.38
Market cap
$945.98M
Balance sheet
Stretched
2.85x Stretched
Net debt $1.18B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 1.1% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 6/10 years.
- Risk Net debt grew 11.9% over 3 years.
- Risk Operating margin compressed from 7.0% to 5.5% over 3 years.
What this company does
Universal Corporation
Universal Corporation acts like a wholesaler for ingredients used in food and drinks, mainly selling tobacco leaves and plant-based extracts worldwide. Their money comes from these two main product categories, supplying large companies that make the snacks and beverages we buy. Understanding where these basic ingredients come from helps us see how the bigger food and drink industry functions.
How the company got here
Universal Corporation has a long history, tracing its roots back to 1886 when it was incorporated out of several independent leaf merchants following the breakup of the American Tobacco Company trust [5]. For over a century, the company has established itself as a leading global supplier of leaf tobacco and, more recently, plant-based ingredients [9, 16]. A significant turning point in its diversification strategy was the acquisition of FruitSmart in January 2020, followed by Shank's Extract in 2021, marking a deliberate expansion into the ingredients sector [5].
What it actually does
Universal Corporation acts as a business-to-business (B2B) supplier, meaning it sells its products to other companies rather than directly to individual consumers. It sources, processes, and supplies agricultural products, primarily leaf tobacco and a growing range of plant-based ingredients. These ingredients are then used by manufacturers in a wide variety of food, beverage, and other consumer products [1, 9].
Tobacco Operations
This is Universal Corporation's largest business segment, accounting for the vast majority of its revenue [11]. In this segment, the company procures, processes, packs, stores, and ships various types of leaf tobacco, such as flue-cured, burley, dark air-cured, and oriental leaf tobacco [1, 4]. These tobacco leaves are then sold to manufacturers who use them to produce consumer tobacco products like cigarettes and cigars. Universal also provides specialized services related to tobacco, including custom blending and testing [1, 6].
Ingredients Operations
This segment represents Universal Corporation's diversification into plant-based ingredients for the food and beverage industries [1, 9]. It involves the production and distribution of a wide array of products derived from fruits, vegetables, herbs, and other botanicals. These include juices, concentrates, purees, dehydrated products, extracts, natural flavors, and colors [1, 6]. These ingredients are supplied to consumer packaged goods manufacturers, retailers, and food and beverage companies to be used in their own product formulations.
What management is betting on now
Universal Corporation's management is focused on creating sustainable value by executing well across both its business segments [10]. In the tobacco operations, the company aims to navigate current market conditions, such as oversupply, by making careful purchasing decisions and maintaining its role as a trusted partner to customers [10]. For the ingredients segment, the strategy involves leveraging investments made in the platform, improving how products are sold (commercial execution), optimizing the use of its facilities, and increasing overall efficiency [10]. The company is also committed to sustainability and strengthening communities through its global supply chains [9].
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$199.55M
FY2025 Q4
$151.03M
FY2026 Q1
$-217.16M
FY2026 Q2
$23.70M
FY2026 Q3
$95.11M
FY2026 Q4
$178.61M
FY2027 Q1
$-133.04M
FY2027 Q2
$-116.30M
Revenue
$617.37M
Net income
$12.58M
Diluted EPS
0.50
Operating cash flow
$-96.66M
Free cash flow
$-116.30M
Fetching…
Sources
Revenue
$520.26M
Net income
$-5.02M
Diluted EPS
-0.20
Operating cash flow
$-117.12M
Free cash flow
$-133.04M
Fetching…
Sources
Revenue
$689.85M
Net income
$-43.28M
Diluted EPS
-1.72
Operating cash flow
$187.14M
Free cash flow
$178.61M
Fetching…
Sources
Revenue
$853.15M
Net income
$33.25M
Diluted EPS
1.32
Operating cash flow
$114.32M
Free cash flow
$95.11M
Fetching…
Sources
Revenue
$749.43M
Net income
$34.17M
Diluted EPS
1.36
Operating cash flow
$32.74M
Free cash flow
$23.70M
Fetching…
Sources
Revenue
$592.64M
Net income
$8.50M
Diluted EPS
0.34
Operating cash flow
$-205.10M
Free cash flow
$-217.16M
Fetching…
Sources
Revenue
$690.17M
Net income
$9.34M
Diluted EPS
0.37
Operating cash flow
$158.75M
Free cash flow
$151.03M
Fetching…
Sources
Revenue
$927.98M
Net income
$59.64M
Diluted EPS
2.37
Operating cash flow
$215.64M
Free cash flow
$199.55M
Fetching…
Sources
Is it cheap or expensive?
Fair value $62.96 vs current price $37.95
Wall Street consensus is the average analyst price target: $60.00 (-4.7% lower than our fair-value estimate).
Our most-likely fair value is $62.96 a share — about 65.9% above today's price of $37.95, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.2B. Interest coverage 2.9x.
Net debt
$1.18B
Interest coverage
2.85x
Universal Corporation's profit covers its interest bill about 2.9 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
UVV
BASELINE
Universal Corporation
Total debt $1.23B Interest coverage 2.85x This is the baseline the peer rows are being compared against.
Total debt $310.11M Interest coverage 3.76x +32% vs UVV Carries about 1.3x more debt cushion than UVV.
Total debt $24.06B Interest coverage 10.23x +258% vs UVV Carries about 3.6x more debt cushion than UVV.
Total debt $47.73B Interest coverage 9.41x +230% vs UVV Carries about 3.3x more debt cushion than UVV.
Total debt $46.52B Interest coverage 6.05x +112% vs UVV Carries about 2.1x more debt cushion than UVV.
Total debt $348.56M Interest coverage 11.86x +315% vs UVV Carries about 4.2x more debt cushion than UVV.
What you should know
The case for and against UVV
3 Rewards
2 Risks
Rewards
-
Returns 1.1% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 6/10 years.
-
Dividend yield is 8.8% with 41-year payout history.
Risks
-
Net debt grew 11.9% over 3 years.
-
Operating margin compressed from 7.0% to 5.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
10.81x
P/B
0.68x
P/S
0.35x
EV/EBITDA
10.67x
PEG ratio
10.45x
Profitability
How much profit each dollar creates
Gross margin
17.1%
Operating margin
5.5%
Net margin
-0.1%
ROE
1.1%
ROA
3.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.87x
Current ratio
2.54x
Quick ratio
0.67x
Total debt
$1.23B
Total cash
$47.02M
Growth
How the business has been compounding
Revenue TTM
$2.68B
Revenue 5Y CAGR
8.4%
EPS TTM
-0.10
EPS 5Y CAGR
-36.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$87.68M
Free CF TTM
$80.27M
FCF margin
3.0%
Dividend
Shareholder payout
Yield
8.8%
Payout ratio
431.6%
Last ex-div date
2027-01-11