UVV
Universal Corporation
$45.41
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 29.6% below fair value
You pay
$45.41
Bear
$53.12
Fair
$64.50
Bull
$75.89
Bear
$53.12
+17.0%
$3.78 × 14x P/E
Fair
$64.50
+42.0%
$3.78 × 17x P/E
Bull
$75.89
+67.1%
$3.78 × 20x P/E
Adjust Assumptions
17.1x
3.78$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
12.0x
Summary
Applying a 17x P/E to adjusted EPS of $3.78, the base-case value is $64.50 per share. DDM cross-check: $47.61.
Warnings
The company's reported profits differ from official accounting profits by 191%. Check what costs are being left out of the adjusted number.
The company pays out 254% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $47.61 (below our primary estimate by 26%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples