Union Pacific Corporation – Falling Crude Prices Might Present An Opportunity

Union Pacific CorpUnion Pacific Corporation (NYSE:UNP) is the largest publicly traded railroad company in the world. The company commands over 31,000 miles and is strategically well placed to take advantage of transportation network in the western US. Crude-by-rail has been the choice of transport while the pipeline infrastructure is still being built. Over the course of last few years, crude has become one of the largest commodities transported on railroads. The current downturn in crude prices may result in capex cuts from oil companies in North America – resulting in some short-term headwinds for the railroad industry. However, railroads still remain the pulse of the economy and are excellent long-term investments.

Continue reading the full analysis of Union Pacific Corp.

6 thoughts on “Union Pacific Corporation – Falling Crude Prices Might Present An Opportunity

  1. R2R,
    UNP has the market cap leadership/economic moat and pair it with high dividend growth rate and low payout ratio, very appealing. PE seems rich but its cheaper compared to its competitor, but entry yield is low for me. I will add UNP on my watch list and will research further. Thanks for sharing UNP.
    FFF

    • FFF,
      Yes, the starting yield is a bit low, but the high growth rate balances it out I think. UNP is one of the best run railroads (just saw a survey where CNI was given top rank by shippers, and UNP was close second). One thing I forgot to include in my wrteup is about the direct competition. UNP competes directly with BNSF – as their market place is almost identical.

      Thanks for stopping by and sharing your thoughts
      R2R

    • I was this close to picking up UNP, but ended up going with CN instead. I want to add UNP to my portfolio as well…I will be looking for weaknesses in the future.

      Thanks for the comment
      R2R

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