Universal Corporation (UVV), together with its subsidiaries, operates as a leaf tobacco merchant and processor worldwide. It engages in selecting, procuring, buying, processing, packing, storing, supplying, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. This dividend champion has increased distributions for the past 40 consecutive years. The latest dividend increase was in November 2010, when the company raised distributions by 2.10% to 48 cents/share.
Over the past decade this dividend growth stock has delivered an annualized total return of 6.60% to its shareholders.
The company has managed to deliver an average increase in EPS of 3.70% per year since 2000. Analysts expect Universal Corporation to earn $4.60 per share in 2011.
The company’s return on equity has been on the rise since reaching a bottom in 2006. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
The annual dividend payment has increased by 4.60% per year since 2000. A 5% growth in distributions translates into the dividend payment doubling every fifteen years. If we look at historical data, going as far back as 1994, we would see that Universal Corporation has actually managed to double its dividend payment every sixteen years on average.
The dividend payout ratio has increased slightly over the past decade, having exceeded 50% in 2006 and 2007. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
Currently, Universal Corporation is attractively valued at 8 times earnings, yields 4.90% and has a sustainable dividend payout. I would continue monitoring the stock and will consider adding to a position in the stock on dips.
Full Disclosure: UVV
Relevant Articles:
- The case for dividend investing in retirement
- Eight Dividend Growers In the News
- Intel Corporation (INTC) Dividend Stock Analysis
- ONEOK Inc (OKE) Dividend Stock Analysis
Popular Posts
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing holdings, but ...
-
I review the list of dividend increases as part of my monitoring process. This process helps me review how the companies I own are doing. It...
-
Yield on Cost is a fascinating metric. It calculates the dividend yield based on the original cost at the time of purchase. Yield on cost i...
-
My retirement strategy is focused on living off dividends. Dividends are more stable, predictable and reliable than capital gains. Dividends...
-
A famous saying goes that there are two things certain in this world: death and taxes. While I am pretty sure I can’t escape death, I know t...
-
As a shareholder, there are two ways to make profits from a stock. The first way is when you sell your stock for a gain, after it has incre...
-
I review the list of dividend increases as part of my monitoring process every week. This exercise helps me review the performance of existi...
-
A pattern of steady dividend payments and dividend increases is only possible if a business can generate enough cashflows to support operati...
-
Planning your retirement is one of the most challenging exercises in the world. There are plenty of ways, methods and advisors, who try to i...
-
The employer match is one of the best features of workplace retirement accounts such as 401 (k) plans ( Pre-tax and Roth). It’s a contributi...