Union Pacific (UNP) DIvidends Date & History

Key Takeaways

• UNP provides a 2.20% dividend yield based on a $5.52 annual payout, delivered quarterly at $1.38 per share.
• The payout ratio stands at approximately 45%, signaling strong coverage by earnings.
• Union Pacific has paid dividends for 127 consecutive years, with nearly 20 years of annual increases.
• Free cash flow of $3.92 billion (TTM) comfortably covers dividend obligations.
• Compared to peers like CSX (1.29% yield) and NSC (1.82% yield), UNP offers a competitive yield.
• Recent ex-dividend date was February 27, 2026, with payment on March 31, 2026.

Dividend Overview

Union Pacific Corporation (UNP), a leading Class I railroad, maintains a disciplined dividend policy characterized by quarterly payments and consistent growth. The current quarterly dividend is $1.38 per share, equating to an annual payout of $5.52 and a yield of 2.20%. This positions UNP as a dividend growth stock rather than a high-yield play, appealing to investors seeking reliable income from a capital-intensive industry. The company has paid dividends without interruption for 127 years, underscoring its commitment to shareholders amid the cyclical nature of freight transportation.

Dividend History and Growth

Union Pacific's dividend history reflects steady progression. From $1.18 per share in early 2022, the quarterly payout rose to $1.30 by mid-2022, $1.34 in early 2025, and $1.38 later that year, marking a recent 3% increase. Over the past five years, dividends have grown at an average annual rate of about 7%, with nearly 20 consecutive years of increases. This track record aligns with the company's long-term strategy of returning capital through dividends while reinvesting in network efficiency and precision scheduled railroading.

Dividend Sustainability and Payout Ratio

UNP's dividend sustainability is robust, supported by a trailing payout ratio of 45.41%, meaning less than half of earnings are distributed, leaving ample room for growth and reinvestment. Trailing twelve-month free cash flow (FCF) stands at $3.92 billion, well above annual dividend expenditures of roughly $3.3 billion, providing strong coverage. Despite a debt-to-equity ratio of 177.73%—typical for railroads due to infrastructure needs—operating cash flow of $9.29 billion (TTM) ensures financial stability. Earnings growth and operational efficiencies further bolster the dividend's long-term viability.

Dividend Compared to Industry Peers

In the railroad sector, UNP's 2.20% yield outperforms CSX's 1.29% and edges out NSC's 1.82%. Peers share similar payout ratios around 40-50%, reflecting capital-intensive operations that prioritize growth over ultra-high yields. UNP's superior yield, combined with its Western U.S. network dominance, makes it a standout for income-focused investors in transportation.

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Is This Stock Attractive for Dividend Investors?

Union Pacific Corporation (UNP) suits dividend growth investors who prioritize consistency and moderate yields over high immediate income. Its 127-year payment streak and near-20 years of increases appeal to long-term holders seeking compounding returns in a defensive sector. Conservative investors may appreciate the low payout ratio and FCF coverage, which mitigate cyclical freight volume risks. However, those chasing yields above 4% might look elsewhere, as UNP's 2.20% profile emphasizes reinvestment for future growth. Income seekers benefit from quarterly payouts, but exposure to economic slowdowns and fuel costs warrants diversification. Overall, UNP fits portfolios balancing stability and modest appreciation potential.

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