Is Union Pacific Stock a Buy?
Under the circumstances of a slowing U.S. industrial economy, it's been a pretty good year for Union Pacific (NYSE: UNP). The stock is up more than 22% on a year-to-date basis at the time of writing, and this comes even as its revenue carloads declined 3% in the first half while management's outlook for the second half calls for a 2% decline. Throw in the disappointing earnings and outlooks from peers like CSX (NASDAQ: CSX), and the narrative quickly turns negative. However, there's still a lot to like about the stock and a strong case for buying it, so let's take a look at it.
Investors buy stocks for all sorts of reasons, and when it comes to investing in railroad stocks, long-term investors are usually willing to ride out the inevitable cyclicality in their earnings. It also helps if there's a decent dividend to tide over investors in the down periods, and Union Pacific's forward yield of 2.3% is notably higher than the current 10-year treasury yield of 1.6%.
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Source Fool.com
