As transportation stocks help lead the market,Union Pacific (
) shares are trading near new highs.
The stock's sound performance is part of a sector move. The
Dow transportation average is up more than 20% this year, and
IBD's transportation sector was No. 4 out of 33 in Wednesday's
Union Pacific pays a quarterly dividend of 69 cents a share.
That translates to an annualized yield of not quite 2%. The eight
railroad companies that pay dividends have yields that range from
0.7% to 2.5%.
The company raised the dividend most recently in January. It
was the latest of several increases in recent years. The dividend
has gone up more than 150% from the 27 cents a share it was
paying three years ago.
Earnings growth over the past three quarters ranged from 10%
to 18%. That's moderately off from previous quarters and the
company's three-year EPS growth rate of 28%. Its three-year
Earnings Stability Factor is 5, near the best-possible score of 0
on a 0 to 99 scale.
In the first-quarter report, slowing shipments for coal and
grains weighed on results. But crude oil shipments more than
doubled from the year-ago period, thanks to a boom in shale
drilling. Auto and chemicals shipments also were strong in the
"Despite the fact that rail-based crude transportation costs
five times more ($10--$15 per barrel), crude shippers are
compelled to rely on rail-based transport," noted an industry
analysis by Zacks Equity Research.
"This is due to the lack of pipeline infrastructural support
in key oil and gas fields like Bakken Shale Formation in North
Dakota and Montana, Eagle Ford Shale, Barnett Shale and Permian
basin in Texas, the Gulf of Mexico and Alberta oil sand fields in