Universal Corp. (UVV) Raises Quarterly Dividend 36.4% to $0.75; 6.2% Yield

May 23, 2018 4:19 PM EDT

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Universal Corp. (NYSE: UVV) declared a quarterly dividend of $0.75 per share, or $3 annualized. This is a 36.4% increase from the prior dividend of $0.55.

The dividend will be payable on August 6, 2018, to stockholders of record on July 9, 2018, with an ex-dividend date of July 6, 2018.

The annual yield on the dividend is 6.2 percent.

Universal Corporation (NYSE: UVV) today announced that its Board of Directors approved on Tuesday, May 22, 2018, an enhanced capital allocation strategy that demonstrates the Company's focus on sustainable shareholder value creation. The enhanced strategy is the result of an extensive review of Universal's business and capital allocation strategies by the Company and its outside advisors that began in November 2016.

The Company's strategy focuses on four strategic priorities:

Strengthening and investing for growth in Universal's core tobacco business;
Increasing its strong dividend;
Exploring growth opportunities in adjacent industries and markets that utilize our assets and capabilities; and
Returning excess capital through share repurchases.

As part of the Company's commitment to shareholder returns, the Board has increased Universal's annual dividend per share to $3.00, by declaring an increase in its quarterly dividend to seventy-five cents ($0.75) per share on the common shares of the Company, payable August 06, 2018, to common shareholders of record at the close of business on July 9, 2018. This represents a 36% increase, or $0.80 per share, from the current annual dividend rate of $2.20 per share, and reflects a return of approximately 70% of net income attributable to Universal Corporation for fiscal year 2018.

George C. Freeman, III, Chairman, President, and Chief Executive Officer of Universal Corporation, said, "We have devoted considerable time to analyzing our business, as well as the market environment, to determine how we can create a strategy that capitalizes on our core competencies to ensure we are well positioned for the future. Through this review, we have reaffirmed that our mission is to remain the leading global leaf tobacco supplier. By continuing to make disciplined investments within our core business and taking advantage of growth opportunities in tobacco as well as in adjacent industries and markets that utilize our assets and capabilities, we will be able to deliver enhanced value for all shareholders through earnings growth and the generation of free cash flow despite operating in a mature industry.

Mr. Freeman continued, "We are confident in our continued ability to generate strong free cash flow. Our focus on strengthening our balance sheet in recent years has positioned us to enhance our capital allocation strategy and we will continually evaluate opportunities to return capital to shareholders on an ongoing basis. At the same time, we remain committed to maintaining our investment grade credit rating and extending our 47-year history of dividend increases."

In a separate press release today, the Company reported its annual results for the fiscal year ended March 31, 2018.

For a dividend history and other dividend-related data on Universal Corp. (UVV) click here.

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