Turning Point Brands (NYSE:TPB) vs. Universal (NYSE:UVV) Financial Review

Universal (NYSE:UVV) and Turning Point Brands (NYSE:TPB) are both small-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Insider and Institutional Ownership

81.0% of Universal shares are owned by institutional investors. Comparatively, 96.1% of Turning Point Brands shares are owned by institutional investors. 2.2% of Universal shares are owned by company insiders. Comparatively, 5.4% of Turning Point Brands shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Universal and Turning Point Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal	2	0	0	0	1.00
Turning Point Brands	1	1	3	0	2.40

Turning Point Brands has a consensus price target of $101.00, indicating a potential upside of 71.15%. Given Turning Point Brands’ stronger consensus rating and higher possible upside, analysts plainly believe Turning Point Brands is more favorable than Universal.

Profitability

This table compares Universal and Turning Point Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal	-0.09%	1.88%	0.93%
Turning Point Brands	5.08%	6.60%	3.39%

Valuation and Earnings

This table compares Universal and Turning Point Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal	$2.92 billion	0.32	$32.64 million	($0.09)	-421.38
Turning Point Brands	$463.06 million	2.53	$58.17 million	$1.39	42.45

Turning Point Brands has lower revenue, but higher earnings than Universal. Universal is trading at a lower price-to-earnings ratio than Turning Point Brands, indicating that it is currently the more affordable of the two stocks.

Dividends

Universal pays an annual dividend of $3.32 per share and has a dividend yield of 8.8%. Turning Point Brands pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. Universal pays out -3,688.9% of its earnings in the form of a dividend. Turning Point Brands pays out 23.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Universal has increased its dividend for 56 consecutive years and Turning Point Brands has increased its dividend for 7 consecutive years. Universal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Universal has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Turning Point Brands has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Summary

Turning Point Brands beats Universal on 13 of the 17 factors compared between the two stocks.

About Universal

Universal Corporation is a global agricultural products and services company best known for sourcing, processing and supplying leaf tobacco to manufacturers. Its services include managing tobacco supply chains, from crop purchasing and processing to logistics and related support for customers. The company also operates an Ingredients Operations business, which supplies products such as dehydrated fruits and vegetables, flavors, extracts and other plant-based ingredients for food and beverage customers.

About Turning Point Brands

Turning Point Brands, Inc. is a U.S.-based manufacturer, marketer and distributor of branded consumer products, with a portfolio focused on tobacco and nicotine products and related accessories. Its products are sold primarily in the United States, with distribution in international markets as well. The company’s Zig-Zag Products business includes rolling papers, wraps, cones and other products associated with the Zig-Zag brand. Its Stoker’s Products business offers products such as loose-leaf chewing tobacco and moist snuff, along with nicotine pouches sold under brands including Stoker’s and FRE.