Contrasting Universal (NYSE:UVV) and British American Tobacco (NYSE:BTI)

British American Tobacco (NYSE:BTI) and Universal (NYSE:UVV) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Valuation & Earnings

This table compares British American Tobacco and Universal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
British American Tobacco	$33.06 billion	3.21	$3.92 billion	$4.87	10.59
Universal	$2.94 billion	0.46	$95.05 million	$4.11	13.24

British American Tobacco has higher revenue and earnings than Universal. British American Tobacco is trading at a lower price-to-earnings ratio than Universal, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for British American Tobacco and Universal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
British American Tobacco	2	1	5	0	2.38
Universal	0	1	1	0	2.50

British American Tobacco presently has a consensus price target of $51.00, indicating a potential downside of 1.14%. Given British American Tobacco’s higher possible upside, analysts clearly believe British American Tobacco is more favorable than Universal.

Volatility & Risk

British American Tobacco has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Universal has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

16.2% of British American Tobacco shares are owned by institutional investors. Comparatively, 81.0% of Universal shares are owned by institutional investors. 0.0% of British American Tobacco shares are owned by company insiders. Comparatively, 1.9% of Universal shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

British American Tobacco pays an annual dividend of $2.96 per share and has a dividend yield of 5.7%. Universal pays an annual dividend of $3.28 per share and has a dividend yield of 6.0%. British American Tobacco pays out 60.8% of its earnings in the form of a dividend. Universal pays out 79.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal has increased its dividend for 56 consecutive years. Universal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares British American Tobacco and Universal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
British American Tobacco	N/A	N/A	N/A
Universal	3.51%	8.46%	4.10%

Summary

Universal beats British American Tobacco on 10 of the 17 factors compared between the two stocks.

About British American Tobacco

British American Tobacco p.l.c. engages in the provision of tobacco and nicotine products to consumers worldwide. It also offers vapour, heated, and modern oral nicotine products; combustible cigarettes; and traditional oral products, such as snus and moist snuff. The company offers its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Camel, Natural American Spirit, Newport, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, State Express 555 and Shuang Xi brands. It also distributes its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is based in London, the United Kingdom.

About Universal

Universal Corporation processes and supplies leaf tobacco and plant-based ingredients worldwide. The company operates through two segments, Tobacco Operations; and Ingredients Operations. It is involved in the procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to manufacturers of consumer tobacco products. The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes; and dark air-cured tobaccos principally used in the manufacture of cigars, natural wrapped cigars and cigarillos, smokeless, and pipe tobacco products. It also provides value-added services, including blending, chemical, and physical testing of tobacco; service cutting for various manufacturers; manufacturing reconstituted leaf tobacco; just-in-time inventory management services; electronic nicotine delivery systems; and smoke testing services for customers. In addition, the company offers testing services for crop protection agents and tobacco constituents in seed, leaf, and finished products, including e-cigarette liquids and vapors; and analytical services that include chemical compound testing in finished tobacco products and mainstream smoke. Further, it provides a various value-added manufacturing processes to produce specialty vegetable and fruit-based ingredients, as well as botanical extracts and flavorings for human and pet food markets; and recycles waste materials from tobacco production. Universal Corporation was founded in 1886 and is headquartered in Richmond, Virginia.