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Still Avoiding Universal Corp

May 02, 2022 11:55 AM ETUniversal Corporation (UVV)2 Comments
Patrick Doyle profile picture
Patrick Doyle
6.57K Followers

Summary

  • The shares are much cheaper on a PE basis now than they were when I last looked at this stock. They're not cheap enough in my view.
  • The dividend is barely covered, and the capital structure has deteriorated significantly.
  • While I normally like to write put options at this point, the premia on offer for reasonable strike prices don't justify the effort or risk.

Young woman smoking a cigarette outdoors.

VioletaStoimenova/iStock via Getty Images

It's been about 13 months since I signaled that I was turning neutral on Universal Corp. (NYSE:UVV) in an article with the exceedingly original title "Switching to Neutral On Universal Corp.", and in that time the

The size and timing of Universal Corp.

Universal Corp. Obligations (Latest Universal Corp. 10-K)

A financial history of Universal Corp. from 2014 to the present

Universal Corp. Financials (Universal Corp. Investor Relations)

Chart
Data by YCharts

Chart
Data by YCharts

This article was written by

Patrick Doyle profile picture
6.57K Followers
I'm a quant investment newsletter writer who marries fundamental analysis with the latest research in momentum. Over the past few years, I’ve developed a piece of software that helps me track the level of optimism and pessimism embedded in stock price. I seek to challenge the assumptions embedded in price by profitably exploiting the disconnect between what the market thinks and what is a likely outcome. I invest in those companies that have a greater than average chance of giving us all a surprise in the next few months.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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