Tuesday, July 24, 2012

Dividend Machine for week of July 23, 2012 UVV

HAVANA - FEBRUARY 25:   A Cuban tobacco worker...HAVANA - FEBRUARY 25: A Cuban tobacco worker prepares a cigar in the Cohiba tobacco factory on February 25, 2010, in Havana, Cuba. The Cohiba tobacco factory is preparing a new line of the Cohiba brand, Behike, to be presented during tomorrow�s gala dinner and closing auction ending the annual Habanos Tobacco Festival, that takes place in Cuba from Between February 22 to February 26. (Image credit: Getty Images via @daylife)
Dividend Machine for week of July 23, 2012 Universal Corporation (UVV)

            Get over it right now!  Universal Corporation sells tobacco and it makes a lot of money selling tobacco.  Universal (UVV) earned $3.25 per share during the last four quarters and paid out $1.94 in dividends.  

            UVV, trading at about $46.59 is near its high.  My dividend machine project does not use stock price to determine if a stock like UVV should be included in my 2012 dividend machines list.   Therefore, we should look at the four key criteria that define UVV as a dividend machine.

            Current quarterly dividend is $.49 per share.  At $46.59, the dividend yield is 4.2%.   UVV earned $3.25 during the last four quarters and paid out $1.94 in dividends.  This company, it appears to me will be able to continue to pay me income. In spite of efforts to reduce tobacco use, UVV has been able to grow earnings enough to fund dividend increases every year for fifty-eight years.  Their debt to equity ratio (D/E) is .45.

            You might consider UVV for the portion of your portfolio dedicated to income.

Very Truly Yours,

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