Here's Why You Should Retain Union Pacific's (UNP) Stock Now

Core Viewpoint - Union Pacific (UNP) is facing challenges due to a downturn in the freight market, but its proactive expansion efforts, commitment to shareholder returns, and cost-cutting measures are positive factors that may enhance its performance in the long run [1][3][9]. Group 1: Expansion and Growth Initiatives - Union Pacific announced five new Focus Sites at the beginning of Q3 2024, aimed at integrating rail services into business supply chains, which can drive growth and optimize operations [1]. - The company is also committed to reducing greenhouse gas emissions by 50.4% by 2030 and increasing low-carbon fuel use to 20%, aligning with global sustainability trends [11]. Group 2: Financial Performance and Shareholder Returns - In July, Union Pacific raised its quarterly dividend by 3% to $1.34 per share, reflecting its long-standing tradition of rewarding shareholders [2]. - The company reported freight revenues of $5.62 billion, a decrease of 1% year over year, with freight revenues accounting for 93.2% of its total revenue [3]. Group 3: Cost Management and Efficiency - Union Pacific reduced operating expenses by 3% year over year in Q1 2024, aided by measures such as deploying longer trains and increasing freight car velocity [10]. - Fuel expenses decreased by 14%, and expenses on purchased services and materials fell by 6%, contributing to improved efficiency and profitability [10]. Group 4: Market Position and Stock Performance - Union Pacific's shares have appreciated by 11.7% over the past year, outperforming the industry average of 5.4% [12]. - The company currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook in the market [5].