July 07, 2025 a 03:31 am
UNP: Dividend Analysis - Union Pacific Corporation
Union Pacific Corporation (UNP), with its robust historical dividend record, demonstrates strong stability and growth potential for income-focused investors. The corporation's sustainable payout ratios and steady dividend growth reinforce its reliability as a dividend-paying entity.
📊 Overview
The following table presents key indicators of Union Pacific Corporation's dividend profile, providing investors with critical insights into its sector standing and dividend consistency:
| Key Indicator | Value |
|---|---|
| Sector | Industrials |
| Dividend Yield | 2.42% |
| Current Dividend Per Share | 5.29 USD |
| Dividend History | 46 years |
| Last Cut or Suspension | None |
📈 Dividend History
Union Pacific Corporation boasts a long-standing history of uninterrupted dividends, a crucial metric for evaluating long-term income stability. Such consistency lowers investment risk and enhances investor confidence.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 2.68 |
| 2024 | 5.28 |
| 2023 | 5.20 |
| 2022 | 5.08 |
| 2021 | 4.29 |
🗣️ Dividend Growth
An important indicator of future dividend potential is growth. Union Pacific's growth remains moderate yet positive, signifying potential for capital and income appreciation.
| Time | Growth |
|---|---|
| 3 years | 7.17% |
| 5 years | 7.37% |
The average dividend growth is 7.37% over 5 years. This shows moderate but steady dividend growth.
🧮 Payout Ratio
Payout ratios, based on earnings and cash flow, reflect a company's capacity to sustain its dividends. Monitoring these ratios helps investors gauge dividend safety.
| Key Figure | Ratio |
|---|---|
| EPS-based | 47.21% |
| Free Cash Flow-based | 53.80% |
The EPS payout ratio of 47.21% and FCF payout ratio of 53.80% indicate a balanced distribution strategy, reflecting well-managed dividend obligations.
⚖️ Cashflow & Capital Efficiency
Strong cash flow and efficient capital allocation are imperative for sustaining dividends. The data below illustrates Union Pacific's strategic financial management approach.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.25% | 3.19% | 4.45% |
| Earnings Yield | 4.87% | 4.26% | 5.43% |
| CAPEX to Operating Cash Flow | 37.94% | 43.03% | 38.67% |
| Stock-based Compensation to Revenue | - | - | 0.40% |
| Free Cash Flow / Operating Cash Flow Ratio | 63.06% | 56.96% | 61.33% |
Union Pacific showcases effective resource utilization with a robust cash flow position, enabling potential future growth and safety of its dividend commitments.
📉 Balance Sheet & Leverage Analysis
A deep analysis of leverage ratios provides insights into Union Pacific's financial stability and debt management, critical elements for sustaining dividends over the long term.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.92 | 2.31 | 2.85 |
| Debt-to-Assets | 47.94% | 50.91% | 52.91% |
| Debt-to-Capital | 65.78% | 69.80% | 74.00% |
| Net Debt to EBITDA | 2.52 | 2.78 | 2.66 |
| Current Ratio | 0.73 | 0.81 | 0.72 |
| Quick Ratio | 0.62 | 0.67 | 0.58 |
| Financial Leverage | 4.01 | 4.54 | 5.38 |
The trends in leverage ratios suggest a prudent management of liabilities, coupled with strong debt service capacity, enhancing long-term dividend sustainability.
📈 Fundamental Strength & Profitability
Examining profitability ratios aids in understanding Union Pacific's capability to generate healthy returns and sustain growth momentum.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 39.95% | 43.14% | 57.54% |
| Return on Assets | 9.96% | 9.50% | 10.69% |
| Net Margin | 27.82% | 26.45% | 28.13% |
| EBIT Margin | 41.50% | 39.69% | 41.58% |
| EBITDA Margin | 51.54% | 49.45% | 50.80% |
| Gross Margin | 45.52% | 43.65% | 45.05% |
| Research & Development to Revenue | - | - | - |
With high profitability metrics, Union Pacific Corporation is well-positioned to maintain its dividend payments, reflecting sound financial health and operational efficiency.
📊 Price Development
🗣️ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 34/40
🔍 Rating
Union Pacific Corporation exhibits a strong dividend profile supported by a stable financial foundation and prudent fiscal strategies. It is recommended for dividend-focused investors seeking consistency and moderate growth potential.