Is Universal Corp. overvalued or undervalued?

As of 22 May 2024, the valuation grade for Universal Corp. has moved from expensive to very attractive, indicating a significant shift in its perceived value. The company is currently undervalued, supported by a P/E ratio of 11, which is notably lower than its peer Turning Point Brands, Inc. with a P/E of 23.59. Additionally, Universal Corp. boasts an EV to EBITDA ratio of 7.64, further emphasizing its attractive valuation compared to the industry.
In terms of performance metrics, Universal Corp. has a ROCE of 10.70% and a ROE of 8.94%, which are competitive within its sector. The peer comparison highlights that while Universal Corp. is deemed very attractive, its closest competitor, Turning Point Brands, is categorized as very expensive. This contrast reinforces the undervaluation thesis. Furthermore, despite a recent dip in stock performance relative to the S&P 500 over the past week, Universal Corp. has outperformed the index over the past year with a return of 24.51% compared to the S&P 500's 10.26%.