Stock Buy $UNP

Union Pacific Corp LogoI initiated this trade a few weeks ago when the transportation sector was getting clobbered due to commodity pricing at the time. Worked out great as short term headlines caused majority of these fantastic companies decline about 10%. There were quite a few good companies to choose from, but as a company UNP have been doing just outstanding. A true leader in railroad industry. Essentially, I decided to stay within the portfolio and build on my current position in UNP.

One fo Americas most recognized companies that links 23 states in the western two-thirds of the country by rail. Union Pacific Corporation has ownership in principal operating company of Union Pacific Railroad. It provides critical transportation role to global supply chain. It is has equally diversified business in agricultural products, automotive, chemicals, coal, industrial product and intermodal. Operates from West Coast and Gulf Coast ports to eastern gateways, connects Canada’s rail system and is the only railroad serving six major Mexico gateways. Union Pacific provides great deal of value to its roughly 10,000 costumers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner.

  • Dividend Yield: 2.0%
  • 3Yr Dividend Growth Rate: 28.3%
  • 5Yr Dividend Growth Rate: 29.4%
  • Payout Ratio: 34.0%
  • P/E: 18.6
  • Consecutive Years of Dividend Raises: 5

I purchased 10 shares for the price of $107.32 adding $22.00 to my annual income.

This is the 4th time I am initiating an acquisition this year. Also, this recent transaction makes it a 3rd time I am adding to my UNP ownership. Currently, the stake represents to be around 5.3% of my current portfolio. This is an excellent weight for a single security in the portfolio. Though, what I really like about this company is that it is a true dividend grower. More specifically, UNP has been very aggressive the way they have been growing their dividend payouts. For example, since August 2013 they have been raising their dividends every 2 quarters, in comparison to regular dividend paying companies raises once every 4 quarters. And this has not just occurred once, there were 3 substantial dividend raises in the last 6 quarters. That shows that this company is committed rewarding their shareholders and hopefully one day grow to be the next generation of dividend champions.

The 12-month dividend income increased to $2,326.

Thank you for reading & have a great day!

10 Comments

  1. Dividend Diplomats on May 3, 2015 at 11:05

    Great purchase Dividend Vet! I used this as an opportunity to invest in NSC, not UNP. But my rationale was very similar to yours and it was a close call between the two companies. You can’t go wrong buying into this rock solid industry. Enjoy your many years of growing dividends!

    Bert, One of the Dividend DIplomats

    • DividendVet on May 3, 2015 at 13:12

      These two companies are unquestionably at the top in their industries. Can’t go wrong owning either one of them, though I though UNP fundamentals were a bit more superior. We will see down the road as for now we will both be receiving some nice dividend payouts and the longer the merrier.

      Thanks for stopping by.

  2. DivGuy on April 27, 2015 at 15:35

    Wow, I would have never guessed such a high growth rate! Pretty impressive and looks like a good timing for rails indeed!

    Cheers,

    Mike

    • DividendVet on April 27, 2015 at 16:02

      I don’t think anyone would. It is what you call a “boring” type of business that consistently generates money in a quiet, off the media type of way. So far the company has been leading the way, lets hope it continues for many more years.

      Thanks for stopping by.

  3. Dividend Growth Investor on April 26, 2015 at 18:38

    DV,

    This is a pretty nice buy there. I think Buffett had some pretty nice words to say about UNP in his annual report. I think besides BNSF, his other top choice would have been UNP. Nice purchase, hope you get to enjoy rising dividends for decades to come!

    Dividend Growth Investor

    • DividendVet on April 26, 2015 at 19:45

      I appreciate for the kind words. There are so many exceptional things about this company. Besides, the shareholder friendliness is becoming greatly valued.

      BNSF is another name I would love to have to compliment UNP, as these rails are incredibly simple businesses to understand with robust fundamentals.

      Lets hope expectations continue!

      Good hearing from you.

  4. Dividend Dreams on April 24, 2015 at 10:37

    A great stock ad you got it on the dip. UNP has been dropping for the past 2-weeks. I may be joining you soon. I have a put expiring today at $108, so 100 shares may be coming my way. Keep up the good work sir.

    DD

    • DividendVet on April 24, 2015 at 15:35

      Yeah, it still offers a great buy in opportunities. Would be glad to have you as a fellow shareholder.

      Best of luck.

  5. DivHut on April 23, 2015 at 21:11

    Thanks for sharing your recent buy with us. The rails might be offering some better values in recent weeks as the oil industry flow has declined dramatically in recent months which means less need for rail transport. UNP, CNI, NS, CSX and KSU might all look interesting these days.

    • DividendVet on April 23, 2015 at 22:14

      My pleasure. There are plenty of good opportunities out there, I don’t think there is a period when something in the world is not effecting something. Therefore, it is paramount to take advantage when the market lays it all out for us. One day might be one thing, next day something different, who knows. In my case, UNP looked like a best possible bargain, but other names are not too shabby.

      Thanks for your interest.

Leave a Comment





DividendVet