Dividend Growth Stock Overview: Universal Corporation

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About Universal Corporation

Universal Corporation is the largest supplier of tobacco leaf in the world.  The company was founded in 1918 and changed its name from Universal Leaf Tobacco Company at the end of 1987.  Universal Corporation is structured as a holding company, with Universal Leaf Tobacco Company as its primary subsidiary.  The company does not manufacture or sell consumer tobacco products like cigarettes or cigars; rather, it provides the tobacco to manufacturers that produce them.   According to its annual report, Universal processes 35 – 45% of Africa’s annual tobacco production, 15 – 25% of Brazil’s tobacco production, and 25 – 35% of the United States’ tobacco production.  In addition to supplying tobacco, Universal also provides blending and testing services to the tobacco industry.  The company is headquartered in Richmond, VA and employs more than 28,000 permanent and seasonal workers.

Universal divides its business into 3 reportable segments: North America, Other Regions, and Other Tobacco Operations.  The North America and Other Regions segments provide roughly 20% and 75% of annual revenues, respectively.  These segments supply tobacco for cigarette production.  The Other Tobacco Operations segment, which includes tobacco sourcing for other consumer tobacco products (like cigars and pipes), provides the remaining 5% of company income.

The company is a member of the S&P Mid Cap 400 and Russell 2000 indices and trades under the ticker symbol UVV.

Universal Corporation’s Dividend and Stock Split History

Universal Corporation began increasing dividends in 1972.  The company announces dividend increases in November, with the stock going ex-dividend in January.

Universal has compounded its payout at an average rate of 1.9% over the last 5 years and 2.0% over the last 10 years.

Universal Corporation has split its stock only once in the last quarter century, a 2-for-1 split in January 1992.

Universal Corporation’s Direct Purchase and Dividend Reinvestment Plans

Universal Corporation has both direct purchase and dividend reinvestment plans. You must already be an investor in Universal Corporation to participate in the plans; if you own the stock in your brokerage account, you’ll have to have them transferred into your name in order to join the plans. The minimum investment for additional direct purchases is $10, and the dividend reinvestment plan allows for full or partial reinvestment of dividends.

The plans’ fee structures are extremely favorable to investors – the company picks up all fees for share purchases and sales. You will only pay a fee if you choose to use a market, limit or stop-loss order (as opposed to a batch order) when selling your shares. In this case, the fee will be either $25 (for market orders) or $30 (for limit or stop-loss orders). You will also pay a fee of $5 to have the funds from the sales directly deposited into your account. All fees will be deducted from the sales proceeds.

Helpful Links

Universal Corporation’s Investor Relations Website

Current quote and financial summary for Universal Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Universal Corporation


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