Critical Comparison: RLX Technology (NYSE:RLX) & Universal (NYSE:UVV)

RLX Technology (NYSE:RLX) and Universal (NYSE:UVV) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Volatility and Risk

RLX Technology has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Universal has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Institutional & Insider Ownership

22.7% of RLX Technology shares are held by institutional investors. Comparatively, 81.0% of Universal shares are held by institutional investors. 53.4% of RLX Technology shares are held by insiders. Comparatively, 2.2% of Universal shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

RLX Technology pays an annual dividend of $0.10 per share and has a dividend yield of 5.0%. Universal pays an annual dividend of $3.32 per share and has a dividend yield of 7.3%. RLX Technology pays out 100.0% 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 pays out 431.2% 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.

Analyst Ratings

This is a summary of current ratings for RLX Technology and Universal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLX Technology	0	2	0	0	2.00
Universal	0	2	0	0	2.00

RLX Technology currently has a consensus price target of $2.50, indicating a potential upside of 23.76%. Given RLX Technology’s higher possible upside, equities analysts plainly believe RLX Technology is more favorable than Universal.

Profitability

This table compares RLX Technology and Universal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLX Technology	20.76%	6.15%	5.60%
Universal	0.67%	3.50%	1.74%

Valuation & Earnings

This table compares RLX Technology and Universal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLX Technology	$566.11 million	5.53	$131.83 million	$0.10	20.20
Universal	$2.85 billion	0.39	$32.64 million	$0.77	58.69

RLX Technology has higher earnings, but lower revenue than Universal. RLX Technology is trading at a lower price-to-earnings ratio than Universal, indicating that it is currently the more affordable of the two stocks.

Summary

RLX Technology beats Universal on 9 of the 15 factors compared between the two stocks.

About RLX Technology

RLX Technology Inc., together with its subsidiaries, engages in the manufacture and sale of e-vapor products in the People's Republic of China and internationally. It serves partner distributors and retail outlets. The company was founded in 2018 and is headquartered in Beijing, China.

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.