NYSE:UNP

Stock Analysis Report

Executive Summary

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, engages in the railroad business in the United States.


Snowflake Analysis

Established dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has Union Pacific's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UNP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.7%

UNP

-3.0%

US Transportation

-2.7%

US Market


1 Year Return

11.6%

UNP

16.2%

US Transportation

21.2%

US Market

Return vs Industry: UNP underperformed the US Transportation industry which returned 21.9% over the past year.

Return vs Market: UNP underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

UNPIndustryMarket
7 Day-3.7%-3.0%-2.7%
30 Day-1.6%3.7%0.09%
90 Day4.9%5.3%6.9%
1 Year14.1%11.6%18.4%16.2%23.8%21.2%
3 Year76.5%65.3%57.9%50.3%48.1%38.6%
5 Year68.0%50.0%65.7%32.9%72.5%53.4%

Price Volatility Vs. Market

How volatile is Union Pacific's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Union Pacific undervalued compared to its fair value and its price relative to the market?

21.21x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: UNP ($180.8) is trading above our estimate of fair value ($159.12)

Significantly Below Fair Value: UNP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: UNP is poor value based on its PE Ratio (21.2x) compared to the Transportation industry average (20.3x).

PE vs Market: UNP is poor value based on its PE Ratio (21.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: UNP is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: UNP is overvalued based on its PB Ratio (7x) compared to the US Transportation industry average (2.5x).


Next Steps

Future Growth

How is Union Pacific forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

5.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UNP's forecast earnings growth (6.9% per year) is above the savings rate (1.7%).

Earnings vs Market: UNP's earnings (6.9% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: UNP's earnings are forecast to grow, but not significantly.

Revenue vs Market: UNP's revenue (3.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: UNP's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: UNP's Return on Equity is forecast to be very high in 3 years time (44.7%).


Next Steps

Past Performance

How has Union Pacific performed over the past 5 years?

11.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UNP has high quality earnings.

Growing Profit Margin: UNP's current net profit margins (27.3%) are higher than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: UNP's earnings have grown by 12.6% per year over the past 5 years.

Accelerating Growth: UNP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: UNP had negative earnings growth (-48.1%) over the past year, making it difficult to compare to the Transportation industry average (-45%).


Return on Equity

High ROE: Whilst UNP's Return on Equity (33.69%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Union Pacific's financial position?


Financial Position Analysis

Short Term Liabilities: UNP's short term assets ($4.1B) do not cover its short term liabilities ($4.6B).

Long Term Liabilities: UNP's short term assets ($4.1B) do not cover its long term liabilities ($39.4B).


Debt to Equity History and Analysis

Debt Level: UNP's debt to equity ratio (139.4%) is considered high.

Reducing Debt: UNP's debt to equity ratio has increased from 53.4% to 139.4% over the past 5 years.

Debt Coverage: UNP's debt is well covered by operating cash flow (34.1%).

Interest Coverage: UNP's interest payments on its debt are well covered by EBIT (8.9x coverage).


Balance Sheet

Inventory Level: UNP has a high level of physical assets or inventory.

Debt Coverage by Assets: UNP's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Union Pacific's current dividend yield, its reliability and sustainability?

2.17%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: UNP's dividend (2.15%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: UNP's dividend (2.15%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: UNP's dividends per share have been stable in the past 10 years.

Growing Dividend: UNP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.4%), UNP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UNP's dividends in 3 years are forecast to be well covered by earnings (40.4% payout ratio).


Next Steps

Management

What is the CEO of Union Pacific's salary, the management and board of directors tenure and is there insider trading?

1.5yrs

Average management tenure


CEO

Lance Fritz (56yo)

4.9yrs

Tenure

US$13,886,953

Compensation

Mr. Lance M. Fritz has been the Chief Executive Officer and President of Union Pacific Corporation and Union Pacific Railroad Company Inc. since February 6, 2015 and February 6, 2014 respectively. Mr. Frit ...


CEO Compensation Analysis

Compensation vs Market: Lance's total compensation ($USD13.89M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Lance's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.5yrs

Average Tenure

53yo

Average Age

Experienced Management: UNP's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

5.0yrs

Average Tenure

66yo

Average Age

Experienced Board: UNP's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Lance Fritz (56yo)

    Chairman

    • Tenure: 4.9yrs
    • Compensation: US$13.89m
  • Jim Vena (60yo)

    Chief Operating Officer

    • Tenure: 1yrs
  • Beth Whited (53yo)

    Executive VP & Chief Human Resource Officer

    • Tenure: 1.4yrs
    • Compensation: US$3.22m
  • Rhonda Ferguson (50yo)

    Executive VP

    • Tenure: 3.5yrs
    • Compensation: US$2.62m
  • Scott Moore

    Senior VP of Corporate Relations & Chief Administrative Officer

    • Tenure: 2.1yrs
  • Tom Lange

    Assistant Vice President

    • Jon Panzer

      Senior Vice President of Technology & Strategic Planning

      • Tenure: 0.8yrs
    • Clark Ponthier

      Senior Vice President of Supply Chain & Continuous Improvement

      • Tenure: 1.7yrs
    • Jennifer Hamann (51yo)

      Executive VP & CFO

      • Rick Holmes

        Chief Information Security Officer & Assistant VP of Information Assurance

        • Tenure: 1.4yrs

      Board Members

      • Mack McLarty (72yo)

        Independent Director

        • Tenure: 13.2yrs
        • Compensation: US$317.24k
      • Mike McCarthy (67yo)

        Lead Independent Director

        • Tenure: 4yrs
        • Compensation: US$307.93k
      • Debby Hopkins (64yo)

        Independent Director

        • Tenure: 3yrs
        • Compensation: US$263.87k
      • Dave Dillon (67yo)

        Independent Director

        • Tenure: 5.8yrs
        • Compensation: US$299.52k
      • Erroll Davis (74yo)

        Independent Director

        • Tenure: 15.6yrs
        • Compensation: US$315.43k
      • Jose Villarreal (65yo)

        Independent Director

        • Tenure: 11yrs
        • Compensation: US$281.51k
      • Andy Card (71yo)

        Independent Director

        • Tenure: 13.5yrs
        • Compensation: US$306.72k
      • Lance Fritz (56yo)

        Chairman

        • Tenure: 4.9yrs
        • Compensation: US$13.89m
      • Bob Patel (52yo)

        Independent Director

        • Tenure: 2.5yrs
        • Compensation: US$291.24k
      • Jane Lute (62yo)

        Independent Director

        • Tenure: 3.8yrs
        • Compensation: US$307.18k

      Company Information

      Union Pacific Corporation's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Union Pacific Corporation
      • Ticker: UNP
      • Exchange: NYSE
      • Founded: 1862
      • Industry: Railroads
      • Sector: Transportation
      • Market Cap: US$123.894b
      • Shares outstanding: 694.20m
      • Website: https://www.up.com

      Number of Employees


      Location

      • Union Pacific Corporation
      • 1400 Douglas Street
      • Omaha
      • Nebraska
      • 68179
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      UNPNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1969
      UNPDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1969
      UNPXTRA (XETRA Trading Platform)YesCommon SharesDEEURJan 1969
      UNP *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJan 1969
      UNPSNSE (Santiago Stock Exchange)YesCommon SharesCLUSDJan 1969
      UNPSWX (SIX Swiss Exchange)YesCommon SharesCHCHFJan 1969
      0R2ELSE (London Stock Exchange)YesCommon SharesGBUSDJan 1969
      UNPETLX (Eurotlx)YesCommon SharesITEURJan 1969
      UNPCWBAG (Wiener Boerse AG)YesCommon SharesATEURJan 1969
      UPAC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR REPR 1/4 COM USD2.50BRBRLJul 2015

      Biography

      Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, engages in the railroad business in the United States. It offers transportation services for agricultural products, including grains, commodities produced from grains, fertilizers, and food and beverage products; coal and sand, as well as petroleum, liquid petroleum gases, and renewables; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, and soda ash, as well as intermodal and finished vehicles. As of December 31, 2018, its rail network included 32,236 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 23:55
      End of Day Share Price2020/01/27 00:00
      Earnings2019/12/31
      Annual Earnings2019/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.