Dividend Increase: UNP

ID-100130817-300x200 Dividend Increase: UNPUnion Pacific Corporation (UNP) just declared $0.665 quarterly dividend. This is an increase of 9.9% from $0.605.

I own 13 shares, so this will increase my annual dividend income by $3.12 to $4,693.14

I updated both my Passive Income page as well as my Portfolio page to reflect the changes.

 

My Thoughts:

I love the railroad business. Its so boring, but they continue to increase earnings year in and year out. UNP covers most of the west coast and the central US with railroad tracks. It is extremely hard for competitors to start taking shares from UNP because of the high intail capital that must be invested.

Currently, UNP has a dividend payout of 42% which is great. They can continue to grow the dividend at or near a double-digit rate for years to come.

The only downside I see with this company is that it is expensive. It currently has a PE of 24.1 with a forward PE of 18.5. I would like to see a PE of around 15 before I consider it as an attractive investment.

So far UNP has been a great investment for me. I have made about 40% profit from my purchase. I do plan to add more once the stock is at an attractive valuation.

UNP is overvalued and I recommend it as a HOLD at this time.

Screen-Shot-2018-01-30-at-7.05.50-PM Dividend Increase: UNPSource: fastgraphs.com

 

Liking the dividend increase? Want to own more shares of UNP? What do you think?

 

Thanks for reading, and don’t forget to follow me for great investment ideas.

 

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