I recently added to my shares of UNP : Union Pacific Corporation because I feel it is still undervalued and my position is currently down 14%. Seems like the perfect time to average down my cost. Here is why I still love UNP.
- Bought 11.53 shares of UNP @ $86.70
Here are the stats I used to determine this was a good buy for me:
- Current Dividend: 2.8%
- Current P/E : 14.7
- Dividend Payout Ratio: 33%
- Years Paying Dividend : 35 Years!
- Dividend Growth Rate : 10.6% (over past 19 years)
Above, you can see that historically, the stock price has rarely if ever, dropped below into the Dark green color, or below the orange EPS line. The current stock price is sitting right on the line after a recent pullback. This would indicate the stock is currently not over valued and maybe starting to become under valued. This is however just a graph and not a catch all indicator. Next we will look at dividend history.
As you can see from above, the dividend history of this stock is outstanding! They have paid a dividend for 35 years with increases the past 9 consecutive years. The third column above shows the increases in recent years and it is fantastic! Double digit dividend growth the past 8 years! 15% increase in 2015 over 2014 will make it 9 straight years.
This kind of growth might be scary if the dividend payout ratio was increasing with the same rate. It's not! The fourth column above shows the constant ~30% payout ratio so UNP still has plenty of dividend growth available based on the current EPS.
The stock has had quite a run up recently, followed by a nice pullback. This opportunity was too good for me to pass up so I bought more.
Disclaimer: Long UNP
Disclaimer: I am not a licensed investment professional. I am not liable for any losses suffered by any parties. Any information on this site is my opinion only and should not be used for investments of any kind.