Freight Demand and Consistent Dividends: Why Union Pacific (UNP) Remains a Dividend Favorite

Union Pacific Corporation (NYSE:UNP) is included among the 13 Best Consistent Dividend Stocks to Buy Now.

Union Pacific Corporation (NYSE:UNP) is a railroad holding company. It stands as a logistics powerhouse, though its business looks quite different from traditional real estate. Instead of warehouses, its assets consist of 32,693 miles of track, and its revenue comes from hauling freight such as coal, grain, and automobiles.

However, the growth potential for Union Pacific Corporation (NYSE:UNP) is naturally limited. The railroad business comes with constraints, as most of its capital goes toward maintaining and upgrading existing tracks rather than investing in the expensive process of laying down new ones. With limited opportunities to expand its physical network, Union Pacific must rely on efficiency gains, such as improving pricing power and increasing volumes on its current system, to drive future growth.

That said, Union Pacific Corporation (NYSE:UNP) is a solid dividend company. It has paid consistent dividends for 125 years and has raised its payouts for 19 years in a row. Currently, it offers a quarterly dividend of $1.38 per share and has a dividend yield of 2.57%, as of September 12.

While we acknowledge the potential of UNP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Dividend Stocks to Buy for Retirement and 10 Best Strong Buy Dividend Stocks to Invest in Now.

Disclosure: None.