March 10, 2026 a 03:31 am
UNP: Dividend Analysis - Union Pacific Corporation
Union Pacific Corporation exhibits a robust dividend profile, demonstrating stability and moderate growth over the years. With a history of 47 years of consistent dividend payouts and no recent suspensions, Union Pacific showcases reliability in its dividend commitments. This analysis will provide comprehensive insights into its dividend metrics and overall financial health.
📊 Overview
Union Pacific Corporation, operating in the transportation sector, is a significant player with a current market capitalization of approximately $150.49 billion. Its dividend yield sits at a modest 2.07%, which might not be high, but it reflects the company's steady dividend payouts coupled with its capital appreciation potential.
| Metric | Value |
|---|---|
| Sector | Transportation |
| Dividend yield | 2.07 % |
| Current dividend per share | 5.46 USD |
| Dividend history | 47 years |
| Last cut or suspension | None |
🗣️ Dividend History
The consistent dividend history over 47 years is a testament to Union Pacific's financial health and commitment to returning value to shareholders. This long-standing practice of dividend distribution underscores the company's stability and the management's confidence in future cash flows.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 1.38 |
| 2025 | 5.44 |
| 2024 | 5.28 |
| 2023 | 5.20 |
| 2022 | 5.08 |
📈 Dividend Growth
The dividend growth for Union Pacific over recent years reflects a disciplined strategy. A growth rate of 2.31% over three years and 6.99% over five years reflects consistent although moderate growth, which is favorable for long-term investors.
| Time | Growth |
|---|---|
| 3 years | 2.31 % |
| 5 years | 6.99 % |
The average dividend growth is 6.99% over 5 years. This shows moderate but steady dividend growth, ensuring investors of resilience against inflation over time.
✅ Payout Ratio
Payout ratios are pivotal in assessing a company's ability to sustain and grow dividends. Union Pacific's EPS-based payout ratio is at 45.33%, and the FCF-based payout ratio is at 58.94%. These figures suggest that the company's dividend is well-covered by earnings and free cash flows, indicating stability and potential for future growth.
| Key Figure | Ratio |
|---|---|
| EPS-based | 45.33 % |
| Free cash flow-based | 58.94 % |
Both the EPS and FCF payout ratios indicate a well-balanced approach to maintaining dividends while retaining enough earnings for strategic investments and debt reductions.
📊 Cashflow & Capital Efficiency
Understanding cash flows and capital efficiency is crucial for evaluating a company's operational efficiency and investment potential. Union Pacific's free cash flow yield, earnings yield, and capital allocation strategies offer insights into its financial agility and resource use.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 3.19% | 4.25% | 4.01% |
| Earnings Yield | 4.26% | 4.87% | 5.22% |
| CAPEX to Operating Cash Flow | 43.04% | 36.94% | 40.81% |
| Stock-based Compensation to Revenue | 0% | 0% | 0% |
| Free Cash Flow / Operating Cash Flow Ratio | 56.96% | 63.06% | 59.19% |
Union Pacific showcases efficient capital deployment, reflected in its consistent earnings yield and judicious CAPEX relative to operating cash flows, underpinning its capability to generate shareholder returns.
📉 Balance Sheet & Leverage Analysis
Examining the balance sheet indicators and leverage ratios of Union Pacific sheds light on its financial strength and risk levels. Its mix of debt metrics indicates a balance between leveraging growth opportunities and managing risks.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 231.13% | 192.20% | 172.27% |
| Debt-to-Assets | 50.91% | 47.94% | 45.65% |
| Debt-to-Capital | 69.80% | 65.77% | 63.27% |
| Net Debt to EBITDA | 2.78 | 2.52 | 2.36 |
| Current Ratio | 0.81 | 0.77 | 0.91 |
| Quick Ratio | 0.67 | 0.62 | 0.75 |
| Financial Leverage | 4.54 | 4.01 | 3.77 |
Union Pacific maintains a strategic approach with manageable debt levels and financial leverage ratios, suggesting good financial health and ability to meet obligations.
📈 Fundamental Strength & Profitability
Analyzing Union Pacific's profitability indicators provides insight into its operational efficiency and value creation capabilities. These metrics highlight the profit margins and return ratios that underpin shareholder value.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | 43.14% | 39.95% | 38.65% |
| Return on Assets | 9.50% | 9.96% | 10.24% |
| Margins: Net | 26.45% | 27.82% | 29.12% |
| Margins: EBIT | 39.69% | 41.50% | 42.74% |
| Margins: EBITDA | 49.45% | 51.54% | 52.82% |
| Margins: Gross | 43.65% | 45.52% | 59.38% |
| Research & Development to Revenue | 0% | 0% | 0% |
The strong return on equity and net margins indicate effective management practices and robust profit generation, crucial for sustaining competitive advantage.
📉 Price Development
Dividend Scoring System
| Criteria | Score | Representation |
|---|---|---|
| Dividend yield | 3/5 | |
| Dividend Stability | 5/5 | |
| Dividend growth | 4/5 | |
| Payout ratio | 4/5 | |
| Financial stability | 4/5 | |
| Dividend continuity | 5/5 | |
| Cashflow Coverage | 4/5 | |
| Balance Sheet Quality | 4/5 |
Total Score: 33/40
Rating
Union Pacific Corporation presents a compelling dividend profile characterized by stability, moderate growth, and solid financial metrics. The company’s strong balance sheet, coupled with disciplined capital allocation and efficient operations, results in a positive outlook for long-term dividend sustainability and growth. Union Pacific is recommended for dividend-focused investors seeking both income and gradual capital appreciation.