UNP - Union Pacific: A Now Buyable Dividend Growth Stock (Rating Upgrade)

2024-06-05 07:30:00 ET

Summary

• Since my last article in January, shares of Union Pacific have retreated modestly as my fair value estimate has climbed higher.
• Core pricing increases and a more favorable business mix helped to propel the company's operating revenue and diluted EPS higher in Q1.
• Union Pacific's adjusted debt-to-EBITDA ratio improved to sub-3 levels for the quarter.
• Shares of the railroad operator could be priced at a discount to fair value.
• Union Pacific looks to be set up to deliver 35% cumulative total returns through 2026.

In investing, time can make all the difference in the world. A stock that may have been an interesting buy one day could be a hold the next day, week, or month, or vice versa. This is because market sentiment can quickly (or gradually) swing from one direction to another.

That's why I believe it is so important to be selective in deploying capital in the stock market. There's no need to chase a stock when it appears to be unfavorably valued. With enough patience, the valuation will generally become more favorable....

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