A strong performer from today's evening trading session is Union Pacific, whose shares rose 2.7% to $231.37 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Union Pacific's Valuation Is in Line With Its Sector Averages:
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 22.19 and an average price to book (P/B) ratio of 4.06. In contrast, Union Pacific has a trailing 12 month P/E ratio of 22.2 and a P/B ratio of 10.07.
Union Pacific's PEG ratio is 3.55, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $22,832 | $21,708 | $19,533 | $21,804 | $24,875 | $24,140 |
| Gross Margins | 37% | 39% | 40% | 43% | 40% | 38% |
| Operating Margins | 37% | 39% | 40% | 43% | 40% | 38% |
| Net Margins | 26% | 27% | 27% | 30% | 28% | 26% |
| Net Income (MM) | $5,966 | $5,919 | $5,349 | $6,523 | $6,998 | $6,365 |
| Net Interest Expense (MM) | $870 | $1,050 | $1,141 | $1,157 | $1,271 | $1,342 |
| Depreciation & Amort. (MM) | $2,191 | $2,216 | $2,210 | $2,208 | $2,246 | $2,298 |
| Earnings Per Share | $7.91 | $8.38 | $7.88 | $9.95 | $11.21 | $10.41 |
| Diluted Shares (MM) | 754 | 706 | 679 | 655 | 624 | 573 |
