Turning Point Brands (NYSE:TPB) & Universal (NYSE:UVV) Head to Head Comparison

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

Insider & 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, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Universal pays an annual dividend of $3.32 per share and has a dividend yield of 8.4%. 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 13.7% 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.

Volatility & Risk

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

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	0.67%	3.50%	1.74%
Turning Point Brands	8.78%	11.35%	5.69%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal	$2.92 billion	0.33	$32.64 million	($0.09)	-436.89
Turning Point Brands	$463.06 million	2.74	$58.17 million	$2.33	28.11

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.

Analyst Recommendations

This is a summary of current ratings for Universal and Turning Point Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal	1	1	0	0	1.50
Turning Point Brands	1	1	3	0	2.40

Turning Point Brands has a consensus target price of $108.50, suggesting a potential upside of 65.69%. Given Turning Point Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Turning Point Brands is more favorable than Universal.

Summary

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

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.

About Turning Point Brands

Turning Point Brands, Inc., together with its subsidiaries, manufactures, markets, and distributes branded consumer products. The company operates through three segments: Zig-Zag Products, Stoker’s Products, and Creative Distribution Solutions. Zig-Zag Products segment markets and distributes rolling papers, tubes, finished cigars, make-your-own cigar wraps, and related products, as well as lighters and other accessories under the Zig-Zag brand. The Stoker’s Products segment manufactures and markets moist snuff tobacco and loose-leaf chewing tobacco products under the Stoker’s, Beech-Nut, Durango, Trophy, and Wind River brands. Its Creative Distribution Solutions segment market and distribute other products without tobacco and/or nicotine to individual consumers through VaporFi B2C online platform, as well as non-traditional retail through VaporBeast. In addition, it markets and distributes cannabis accessories and tobacco products. The company sells its products to wholesale distributors and retail merchants in the independent and chain convenience stores, tobacco outlets, food stores, mass merchandising, drug store, and non-traditional retail channels. The company was formerly known as North Atlantic Holding Company, Inc. and changed its name to Turning Point Brands, Inc. in November 2015. Turning Point Brands, Inc. was founded in 1988 and is headquartered in Louisville, Kentucky.