Here's Why You Should Retain Union Pacific Stock for Now

Core Insights - Union Pacific's (UNP) cost-cutting measures are positively impacting its financial performance, although the freight market downturn is a significant challenge [1][6] - The company is committed to shareholder returns through dividends and share repurchases, with a recent announcement of a 3% quarterly dividend increase [2][3] Financial Performance - Core pricing gains, improved operational efficiency, and the sale of intermodal equipment are enhancing Union Pacific's financial results [2] - In Q2 2024, UNP reported a 4% year-over-year decrease in operating expenses to $3.6 billion, driven by productivity improvements and a 6% reduction in compensation and benefits expenses due to a 5% decrease in headcount [4] - The company plans to repurchase approximately $1.5 billion in shares by the end of 2024, having already bought back over $100 million in shares in the latter part of Q2 2024 [3][2] Liquidity Position - Union Pacific's liquidity is strong, with a current ratio of 1.05 at the end of Q2 2024, up from 0.81 at the end of 2023, and cash and cash equivalents of $1.15 billion against a current debt load of $727 million [5] Market Performance - Shares of Union Pacific have increased by 13.6% over the past year, outperforming the industry growth of 9.9% during the same period [6]