Tuesday, September 15, 2015

Recent Buy (UNP) : September 15, 2015

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
This purchase adds $25.41 to my forward annual dividends bringing my new total to $1,217.46.
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)
  Let's take a look at the F.A.S.T Graph:

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.


  1. Adam,
    An excellent purchase here! I really like UNP growth numbers - I was a bit surprised to see this a couple months ago when I analyzed the company. I think it is a good time to buy or average down.

    1. Thanks D4s! I hear ya. I thought the numbers were good when I first bought the stock but man they just keeping looking better! Thanks for stopping in!

  2. Adam,

    Great company here. And I think you got in at a great price. Glad to have you as a fellow shareholder. Enjoy that growing dividend income!! :)

    Best regards.

    1. Thanks Jason! I'm pretty happy with this pickup today. It's too bad I just don't have more capital to put in right now!

      Thanks for stopping by and commenting!