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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Union Pacific Corporation (XNYS:UNP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
UNP
Name:
UNION PACIFIC CORPORATION (XNYS:UNP)
Sector:
1.39B
Industry:
Railroads
CEO:
Mr. Lance Fritz
Total Employees:
30,452
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 58.30% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF UNION PACIFIC CORPORATION(UNP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RAILROADS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
223.94
One Month Price Target:
$225.36
Six Month Price Target :
$232.46
Likely Price in One Year's Time:
Ticker:
$240.98
Likely Trading Range Today Under (Normal Volatility)
$223.32
Price Upper limit ($) :
$224.81
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$215.1
This week:
$204.18
This month :
$184.42
Other Primary facts
Market Cap:
142.39B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
624.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.%
-13.03%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$264.93
$246.02
$182.95
$201.86
Medium risk (<10%) entry points
Buy Call
Sell Call
$239.86
Buy Put:
Sell Put:
$235.82
$207.97
$212.06
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
UNP
Sharpe Ratio:
2.39%
Comparison:
UNP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 8.57% higher than the industry
& ratio is 4.98% higher than the market/S&P 500 average
Average Returns/Yield of
UNP
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.11%
Yearly returns:
13.71%
Comparison of returns:
Average annual returns/yield (last 3 years) is -2.86% below industry average
Classification:
UNP, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.41
Statistical test of Returns:
UNP has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.95%
Weekly Volatility:
4.36%
Monthly Volatility:
8.71%
Yearly Volatility:
30.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.60%
Volatility in last five trading days has been -18.12% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.95%
Weekly VaR:
-8.82%
Monthly VaR:
-17.65%
How Much Can the price of
UNP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-61.14%
This translates to price declining to:
$190.41
This translates to price declining to:
$87.03
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
UNP is a 24.56% riskier investment compared to the market/S&P 500 & is 6.71% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -12.05% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
UNP
Beta in relation to market/S&P 500--1.13
Expected beta in 1 year's time:
0.733
Expected beta in 3 year's time:
1.036
Unlevered (debt free) Beta:
0.369
Beta in relation to Nasdaq (XNAS):
0.653
Beta in relation to all global stocks::
0.754
Beta Comparison & Analysis
Beta of competitors/peers::
0.972
Beta is 16.51% higher than peers
Average Industry Beta:
1.292
Beta is -12.38% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
25.76%
Sustainable growth rate is 60.69% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.024
Alpha is 41.28% above industry average alpha yield
Alpha is 153% higher than market/& is unsustainably high
Analysis of Cost of Capital of
UNP
Equity cost of capital:
0.109
Equity cost of capital is -9.13% below industry mean WACC
Unlevered (without debt) cost of capital:
3.55%
Before-tax cost of debt:
3.47%
After-tax cost of debt:
2.74%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.74%
WACC is -24.04% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$36.29
Revenue growth rate per share of (3Y):
11.75
Annual revenue growth rate is 64.82% above the industry average
EPS:
$10.53
Expected Annual growth rate of EPS (3Y):
5.77%
Expected future EPS growth rate is -26.88% lower than the Railroads industry
Free cash flow (FCF) per share:
$9.50
Balance sheet equity growth per share: 35.03%
Equity growth rate per share is 54.83% higher than the industry
Debt per share
$51.20
EBITDA per share
$19.58
Valuation Analysis Today of
UNP
P/E Ratio:
20.85
P/E Ratio of Competitors/Peers:
18.34
P/E ratio is 13.74% higher than main peers & is -1.91% lower than the industry
Stock price/value with industry average P/E ratio: $223.87
UNP is 0.03% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $75.24
Present value of the expected future dividends only: $62.29
P/S (Price to Sales ratio):
6.17
Price to sales ratio is 18.85% above the industry mean
P/B (Price to book value ratio):
11.75
Price to free cash flow: 23.57
Price to free cash flow ratio is 15.89% higher than the industry
Net income growth rate (3Y):
21.22%
Net income growth rate is 31.24% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 10.91%
Dividend yeild: 2.11%
Previous Dividend: $1.30
Previous adjusted dividend: $1.30
Previous Dividend: $4.73
Expected next dividend best case: $1.40
Expected next dividend worst case: $1.20
Average dividend payment (long-term): $1.06
Average dividend increase/decrease (growth rate) % per period: 3.08%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 08/10/2022
Previous dividend payment date: 30/06/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 05/12/2022
Dividend History:
2022-05-27--$1.30
2021-12-17--$1.18
2021-05-27--$1.07
2022-02-25--$1.18
2021-08-30--$1.07
2021-02-25--$0.97
Dividend growth rate is -46.96% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
268.73%
Net debt to equity ratio:
276.76%
Debt to assets ratio:
49.91%
Net debt to assets ratio:
51.41%
Debt-to-asset ratio is -21.23% below industry average
Ability to repay debt:
Interest coverage ratio:
10.42
Interest coverage ratio is 31.28% more than industry average
Looking forward:
Debt growth rate:
11.14%
Annual debt growth is 322% higher than industry average debt growth rate
Debt repayment rate in last quarter: 2.64%
Analysis of Key Statistics
Correlation of price movement with the market:
0.748
Statistical significance of correlation:
UNP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.743
Stock price is 0.56% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.743
Correlation of price movement with Nasdaq (^IXIC):
0.008
Covariance of price movement with the market:
0.009
Kurtosis
10.65
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.487
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
UNP
Gross Profit Margin Ratio:
193%
Operating Profit Margin Ratio:
42.90%
Operating profit margin is 84.62% higher than the industry
Net Profit Margin Ratio:
193%
Effective Tax Rate:
22.95%
Effective tax rate is -3.68% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
57.26%
Return on equity (ROE) is 132.14% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.64%
Return on assets (ROA) is 42.34% higher than the industry
Financial Leverage:
2.0x
Current Ratio:
0.71
Current ratio is -37.61% below industry average
Cash Conversion Cycle (days):
9.5
Cash conversion cycle is -82.59% below industry average
The remaining useful life of property plant & equipment is: 8.2 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
744.2K
Each employee generates 30% more revenue than industry average revenue per employee
EBITDA generated per employee:
401.6K
Each employee generates 44% more EBITDA than industry average revenue per employee
Profit generated per employee:
223.7K
Each employee generates 50% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
45.6K
Each employee generates 41% more free cash flow than industry average revenue per employee
Assets/Capital per employee
2.0M
Each employee generates 41% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
UNP
HONEYWELL INTERNATIONAL INC. (XNAS:HON)
UNITED PARCEL SERVICE, INC. (XNYS:UPS)
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
CATERPILLAR INC. (XNYS:CAT)
DEERE & COMPANY (XNYS:DE)
GENERAL ELECTRIC COMPANY (XNYS:GE)
3M COMPANY (XNYS:MMM)
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
Canadian National Railway Company (XNYS:CNI)
Current Analyst Ratings
Strong buy�21%
Buy�29%
Hold�67%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
22.66B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
11.75B
10.92B
-
-
-
-
1.19B
1.19B
4.00M
1.17B
2.21B
12.23B
9.72B
6.81B
8.84B
2.03B
6.81B
Statement of Cash Flow
Date:
Period:
555.00M
Differed Income Tax :
60.00M
Stock Based Compensation :
-
Change in Working Capital :
34.00M
Accounts Receivables:
- 236000.00K
Other Working Capital:
355.00M
Other Non-Cash Items:
- 43000.00K
Net Cash Provided by Operating Activities:
2.24B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
909.00M
46.00M
955.00M
1.96B
726.00M
237.00M
3.88B
56.79B
-
-
2.28B
-
1.11B
60.18B
-
64.05B
868.00M
1.86B
1.18B
-
2.73B
5.46B
31.97B
1.98B
46.69B
-
52.15B
2.78B
55.94B
- 878000.0K
-
March 31, 2022 at 6:00:00 AM
12.94B
11.90B
64.05B
2.33B
33.84B
32.9B
-
- 836000.00K
- 836000.00K
- 866000.00K
-
- 3183000.00K
- 743000.00K
3.34B
- 1453000.00K
-
- 53000.00K
930.00M
983.00M
2.24B
- 848000.00K
1.39B
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
UNP
2023
2024
2025
2026
2027
$259.73
$279.49
$300.76
$323.65
$348.29