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Union Pacific Corporation (UNP)

Company Dividend Discount ModelIndustry: RailroadsSector: Industrials

Valuation Snapshot

Stable Growth$110.84 - $170.71$138.69
Multi-Stage$155.12 - $169.85$162.35
Blended Fair Value$150.52
Current Price$236.37
Upside-36.32%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.34%7.01%5.365.295.274.674.384.333.833.313.133.91
YoY Growth--1.26%0.44%12.82%6.63%1.08%13.01%15.99%5.48%-19.84%43.63%
Dividend Yield--2.27%2.17%2.62%1.71%1.99%3.07%2.24%2.46%2.96%4.91%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)7,052.00
(-) Cash Dividends Paid (M)3,228.00
(=) Cash Retained (M)3,824.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,410.40881.50528.90
Cash Retained (M)3,824.003,824.003,824.00
(-) Cash Required (M)-1,410.40-881.50-528.90
(=) Excess Retained (M)2,413.602,942.503,295.10
(/) Shares Outstanding (M)599.63599.63599.63
(=) Excess Retained per Share4.034.915.50
LTM Dividend per Share5.385.385.38
(+) Excess Retained per Share4.034.915.50
(=) Adjusted Dividend9.4110.2910.88
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.56%1.56%2.56%
Fair Value$110.84$138.69$170.71
Upside / Downside-53.11%-41.33%-27.78%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)7,052.007,162.167,274.047,387.677,503.077,620.287,848.89
Payout Ratio45.77%54.62%63.46%72.31%81.15%90.00%92.50%
Projected Dividends (M)3,228.003,911.934,616.445,342.006,089.116,858.257,260.22

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.56%1.56%2.56%
Year 1 PV (M)3,550.403,585.703,621.01
Year 2 PV (M)3,802.583,878.593,955.34
Year 3 PV (M)3,993.574,113.904,236.62
Year 4 PV (M)4,131.404,298.204,470.00
Year 5 PV (M)4,223.214,437.414,660.21
PV of Terminal Value (M)73,314.8577,033.3280,901.17
Equity Value (M)93,016.0197,347.12101,844.35
Shares Outstanding (M)599.63599.63599.63
Fair Value$155.12$162.35$169.85
Upside / Downside-34.37%-31.32%-28.14%

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