Union Pacific Corporation (UNP) has been growing its earnings in the double digits and continues on that path as the domestic economy continues growing, transporting cargo across the continent with its railroad business, says Gary Bradshaw, Senior Vice President and Portfolio Manager at Hodges Capital Management.
“Their dividend isn’t big, yielding 1.8% currently, but they raised it 15% this year. Union Pacific’s earnings are growing dramatically and should be about $9.50 in 2013. That’s 15% above the $8.27 they earned in 2012. And in 2014, we think they’ll earn $10.80 to $11 a share,” Bradshaw said.
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Bradshaw says UNP‘s rail business has more than made up the loss of the coal hauling in North America with the transporting of mass quantities of oil to the refineries, and hauling cargo from the shale plays.
“As the economy continues to grow, Union Pacific is moving more cargo, auto parts and housing lumber, and then you have this big shale boom going on in energy all over the United States, where instead of building new pipelines, the railroads are hauling mass quantities of oil to the refineries,” Bradshaw said.
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