A Decade of Rewards: UNP Returns $69 Bil to Investors
In the last decade, Union Pacific (UNP) has returned a notable $69 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, UNP has returned the 35th highest amount to shareholders in history.
| UNP | S&P Median | |
|---|---|---|
| Dividends | $23 Bil | $4.4 Bil |
| Share Repurchase | $45 Bil | $5.5 Bil |
| Total Returned | $69 Bil | $9.0 Bil |
| Total Returned as % of Current Market Cap | 51.7% | 25.6% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Companies By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $835 Bil | 24.0% | $140 Bil | $695 Bil |
| MSFT | $364 Bil | 9.6% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 13.4% | $12 Bil | $331 Bil |
| XOM | $207 Bil | 41.7% | $144 Bil | $63 Bil |
| WFC | $206 Bil | 76.5% | $59 Bil | $147 Bil |
| JPM | $168 Bil | 19.8% | $0.0 | $168 Bil |
| META | $167 Bil | 8.8% | $6.4 Bil | $160 Bil |
| ORCL | $163 Bil | 24.1% | $34 Bil | $129 Bil |
| JNJ | $157 Bil | 37.1% | $104 Bil | $52 Bil |
| CVX | $149 Bil | 53.6% | $97 Bil | $53 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Companies like META and MSFT are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for UNP. (see Buy or Sell UNP Stock for more details)
UNP Fundamentals
- Revenue Growth: 1.1% LTM and 1.4% last 3-year average.
- Cash Generation: Nearly 25.7% free cash flow margin and 40.3% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for UNP was -2.5%.
- Valuation: UNP trades at a P/E multiple of 19.2
- Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and better margins
| UNP | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Rail Transportation | – |
| PE Ratio | 19.2 | 24.0 |
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| LTM* Revenue Growth | 1.1% | 5.1% |
| 3Y Average Annual Revenue Growth | 1.4% | 5.2% |
| Min Annual Revenue Growth Last 3Y | -2.5% | -0.3% |
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| LTM* Operating Margin | 40.3% | 18.6% |
| 3Y Average Operating Margin | 39.2% | 17.8% |
| LTM* Free Cash Flow Margin | 25.7% | 13.1% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
UNP Historical Risk
That said, UNP isn’t immune to big drops. It fell about 47% during the Dot-Com Bubble and nearly 60% in the Global Financial Crisis. The 2018 correction only cut it by around 22%, but the Covid sell-off still knocked it down close to 39%. The recent inflation shock wasn’t kind either, with a roughly 32% pullback. Solid fundamentals matter, but when the market shakes, even strong stocks like UNP can take a serious hit.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read UNP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.