UVV - Universal Corporation: Tactical Liquid Diversifier For The Equity Bucket
2024-05-23 03:47:50 ET
Summary
- Universal Corporation is a mature tobacco company that generates consistent cash flows and offers a high-quality investment option.
- UVV has deep customer networks with major tobacco companies and has a history of rotating inventory into cash quickly.
- The company has a steady dividend yield of 6% and is currently priced at my estimate of fair value.
Investment Summary
Buying passive equity interests in high-quality companies typically involves two distinct routes:
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Names that can deploy incremental capital at a statistical advantage over an extensive period, continuously growing earnings. Expect these companies to trade higher.
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Entities producing equally high returns on their net tangible assets, but without the reinvestment runway to continuously grow. These players throw off cash as dividends.