UVV - Universal Corporation: In The Long Run Dividend Might Go Up In Smoke

• The company operates a classic middle man business in the tobacco sector and thus suffers from rather weak margins.
• Bargaining power with its customers, the major tobacco companies, appears weak.
• Management has been rewarding shareholders in an overly generous fashion and this is beginning to cast down on the balance sheet, especially in light of recent acquisitions.
• The high dividend is endangered if the company continues to underperform and if recent diversification efforts do not gain traction.
• Nevertheless, the dividend appears to be safe for now and management will likely try to keep up the company's status as a dividend king via token increases.

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