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Union Pacific (UNP) Cheers Investors With 10% Dividend Hike

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Reflective of the improving conditions in the United States, as economic activities gather pace with increased vaccination programs, Union Pacific Corporation UNP — one of the leading players in the railroad space — announced a 10% hike in its quarterly dividend payout to $1.18 per share (annualized $4.72). The first installment of the revised dividend will be paid out on Dec 30, 2021, to its shareholders as of Dec 20.

Union Pacific paid out dividends even when the coronavirus-led situation was worse in the United States. As proof of its shareholder-friendly attitude, the company returned $7.9 billion to its shareholders through dividends ($2 billion) and buybacks ($5.9 billion) in the first nine months of 2021. Notably, Union Pacific has been rewarding shareholders on its common stock with dividends for 122 consecutive years.

The upped dividend highlights Union Pacific's commitment to boost shareholders’ value and underscores the company's strong financial condition as well as its bright prospects.

Zacks Rank & Stocks to Consider

Union Pacific currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and C.H. Robinson Worldwide, Inc. CHRW.

The long-term expected earnings per share (three to five years) growth rate for Knight-Swift is pegged at 15%. KNX is benefitting from an improvement in the adjusted operating ratio. Notably, the adjusted operating ratio improved to 82.8% in the first nine months of 2021 compared with 86.6% reported in the first nine months of 2020. In third-quarter 2021, the metric improved to 81.3% from 83.9% a year ago.

This uptick in adjusted operating ratios is primarily driven by higher revenues in the Trucking, Logistics and Intermodal segments. Lower the value of the metric, the better. KNX has surged 49.8% in the past year. Knight-Swift carries a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefitting from a gradual recovery in the economy and freight market conditions in the United States.

LSTR’s top and the bottom line increased substantially in each quarter from the third quarter of 2020, owing to robust revenues in the primary segment — truck transportation. LSTR has surged 32.9% in the past year. Landstar carries a Zacks Rank #2.

The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.

CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 14.1% in the past year. C.H. Robinson sports a Zacks Rank #1.


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Union Pacific Corporation (UNP) : Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
Landstar System, Inc. (LSTR) : Free Stock Analysis Report
 
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