SD60MAC9500 UP accelerates share repurchase program. Article here.
UP accelerates share repurchase program. Article here.
https://www.up.com/cs/groups/public/@uprr/@investor/documents/investordocuments/pdf_unp_4q20_er_slides.pdf
Here is the UP 2020 Earnings Presentation.
See slides 3, 10 and 11 for some significant financial information.
Slide 3 - Capital investment has been declining steadily but seems to have settled at just under $3 billion. Inflation will always eat at a steady dollar amount. If inflation is 2%, after 5 years your are getting about 89.6% of the work accomplished compared to 5 years earlier.
Slide 10 - UP made $5.6 billion for 2020, but paid out $6.3 billion in dividends and share repurchases. That means they used debt for at least a portion of their share repurchases and At least a portion of their capital plan. Debt for capital investment is nit a bad thing if you can match the debt to the life of the asset being deployed. However, UP has not been retiring debt - they have been steadily incasing debt.
Slide 11 - UP debt was $8.607 billion in 2008, support by annual revenues of $17.118 billion. 12 years later, UP debt is $28.970 billion - an increase of 237% compared to 2008 - supported by revenues of $19.533 billion - an increase of 14% over 2008.
Two things support that position, it would seem.
1. UP has cut out expense cost to free up cash generated from revenue to support debt service.
2. Interest rates have been exceptionally low during that time period, so servicing the debt has been relatively inexpensive and "affordable" within their cash flow
That borrowing strategy will work until it doesn't. If they have to roll their debt maturities over at higher interest rates in the future, something in their financial strategy will have to be adjusted from the current strategy to free up cash to pay more in interest expense.
UP to implement employee stock program. Article here.
Jeff waiting to hear your input on this
Maybe they're buying back stock to sell to the employees.
Most of my coworkers are leery about taking them up on the offer. Especially those that do investing beyond their 401K. Partly because they think the current price is too high for the reality of things, partly because there is a restriction to hold it for a year before being able to sell.
I do like the company match. They don't match agreement train and engine service employees' 401K contributions.
I haven't decided yet for myself. If I do partake, it will be long term and a sense of ownership. I used to have stock via my 401K, but when I took the option of having Vanguard manage my account they promptly started selling off my shares. (It was a few years ago, right before the stock split and price started to go up again.) I don't have stock directly, but some of the funds I have might have UP stock.
Jeff
jeffhergertMaybe they're buying back stock to sell to the employees. Most of my coworkers are leery about taking them up on the offer. Especially those that do investing beyond their 401K. Partly because they think the current price is too high for the reality of things, partly because there is a restriction to hold it for a year before being able to sell. I do like the company match. They don't match agreement train and engine service employees' 401K contributions. I haven't decided yet for myself. If I do partake, it will be long term and a sense of ownership. I used to have stock via my 401K, but when I took the option of having Vanguard manage my account they promptly started selling off my shares. (It was a few years ago, right before the stock split and price started to go up again.) I don't have stock directly, but some of the funds I have might have UP stock. Jeff
Back in the 70's Chessie System had a employee stock purchase plan that was done through payroll deductions. I ended up buying 200 shares. I also participated in the Dividend Reinvestment Program - subquently Chessie split the shares 3 for 1. As a result in 1990 I was alble to sell about 900 shares and use the proceeds for a $33K downpayment on my house.
Later on CSX also had some employee stock purchase plans which I participated in ouside of the 401K program. These shares also are in the dividend reinvestment program - it has been a while since I checked, but I have nearly 1K shares at present.
Historically CSX has wanted to maintain their share price in the $30 range, and in the past when the share prices have risen beyond $70 a share they have split. CSX is currently trading over $100 a share.
Never too old to have a happy childhood!
CSX closed yesterday 06/01/21 at $100.30.
Well it seems the proposed Utah Inland Port is moving forward. This will be located West of Salt Lake City. Article here. More information on the Utah Inland Port.
Their map shows it more west of Salt Lake City, just west of the airport. They are also talking about satellite facilities around the state. While the are inking a deal with Oakland, they are also supremely located at the convergence of lines to there, LA and Seattle/Portland.
https://inlandportauthority.utah.gov/maps/
Corrected. Thanks Mike.
kgbw49CSX closed yesterday 06/01/21 at $100.30.
And I see today (6/4/21) where CSX is announcing a split - 3 for 1.
https://seekingalpha.com/news/3703299-csx-to-execute-3-for-1-stock-split-in-the-form-of-stock-dividend?mail_subject=csx-csx-to-execute-3-for-1-stock-split-in-the-form-of-stock-dividend&utm_campaign=rta-stock-news&utm_content=link-2&utm_medium=email&utm_source=seeking_alpha
Boy, oh boy, BaltACD, you sure called that one!
Any other stock tips in your crystal ball?
kgbw49Boy, oh boy, BaltACD, you sure called that one! Any other stock tips in your crystal ball?
Don't have enough familiarity any other corporations tendancies over time.
However, I suspect each corporation has their own pricepoint where they think they can access the investors they desire to attract. Not all corporations are seeking the same kinds of investors.
The Port of Long Beach has signed up with the Utah Inland Port as well. Good news here we can decongest the LA area a bit. Moving transloading and sorting further inland. Article here.
I really like these inland ports. One you can build a point to point train without switching/sorting near the ports. Get all the boxes on a train at the dock. Hustle them to Utah for sort/transload. Build trains for destinations get em' on the road without any intermediate work events. Think of these trains as long distance shuttles. However we still need a fix for the 60 mile drays from the ports to the Inland Empire.. Maybe we can use these new long distance shuttles to block swap traffic at the Inland Empire for transloading... Just a thought...
So.. Just received word that Swift Intermodal has left BNSF and signed an exclusive contract with Union Pacific for domestic moves on it's western lanes. I'll update with more details later.
UPDATE:
The Swift Intermodal contract with BNSF terminates on Jan 1st 2022. UP will assume exclusive handling of Swift Intermodal business west of the Mississippi. Swift Intermodal will in additon be purchasing more 53' containers starting next year.
9500, any idea how much business that is? No worries if you don't have that info - neither do I. Just thought I'd ask on the chance perhaps you might have some info.
jeffhergert Maybe they're buying back stock to sell to the employees. Most of my coworkers are leery about taking them up on the offer. Especially those that do investing beyond their 401K. Partly because they think the current price is too high for the reality of things, partly because there is a restriction to hold it for a year before being able to sell. I do like the company match. They don't match agreement train and engine service employees' 401K contributions. I haven't decided yet for myself. If I do partake, it will be long term and a sense of ownership. I used to have stock via my 401K, but when I took the option of having Vanguard manage my account they promptly started selling off my shares. (It was a few years ago, right before the stock split and price started to go up again.) I don't have stock directly, but some of the funds I have might have UP stock. Jeff
Ask a decent financial analyst about investing in the company you work for. My advice is you should never do that beyond a very token amount. Vanguard did the right thing by selling off the shares. Having an indirect ownership via mutual funds is fine.
I have seen loads of people financially ruined that invested in the employee purchase programs of ENRON, MCI, EDS, etc. Even worse when they were laid off and it came time to sell the shares for funds (because they did not have an emergency fund) the stock was basically worthless or so depressed in value to not be worth selling. A lot of Cousins worked for AT&T and bought into their program heavily. Most have second jobs now in retirement because AT&T has done so crapily over time. It's all about diversification and spreading your risk.
The MCI and Enron collapses hit home close. Neighbors right on my street with familes lost their dream homes and had to move in with Parents again all heavily invested in Employee plan. Very sad.
I don't see that happening to UP but still it is a good investing rule of thumb to follow not to invest more than a token amount. Right now UP is attempting to reward long-term investors via the stock buy back and increasing the dividend payout. UP has a fairly high dividend per share payout. I believe it's $4.50 a share per year or higher.
BTW, if you have over $100k in a 401k it is a better strategy and you retain more in capital growth if you invest in a diversified portfolio of individual stocks vs a Mutual Fund or ETF. Mutual Funds and ETF's carry high fees sometimes whereas individual stocks not so much. Depends on if your plan allows this as well most do not allow individual stock investments because of idiot day traders and the fear that employees might squander all their savings via day trading.
If you have a rollover IRA that you control free and clear, individual stocks are the way to go. Easy to diversify enough with just 2-3 stock holdings, especially if they are reputible multi-national corporations like 3M, Proctor and Gamble, etc. Also, always have the dividend reinvestment option turned on.....at least that is what I do.
kgbw49 9500, any idea how much business that is? No worries if you don't have that info - neither do I. Just thought I'd ask on the chance perhaps you might have some info.
No I don't have anything concrete. Swift only has a fleet of roughly 8,000 53' containers. So I imagine their intermodal division numbers pale in comparison to JBH or Schneider. Here's a link to their earnings report Q1 2021.
I have a cousin whose retirement was heavily invested in stocks. Shortly after he retired was when the stock market took a dive - that really set him back.
A minor part of my retirement savings is in the government's "Thrift Savings Plan." I stayed in the "G" category, which is basically government securities. Some folks have chosen to get into the riskier funds. I no longer contribute as I am now retired, but I still see modest gains from year to year.
It's about time for me to start taking money out of it, while I can enjoy it. It won't be much, but it'll be something.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
jeffhergert I haven't decided yet for myself. If I do partake, it will be long term and a sense of ownership. Jeff
When laying out an investment plan for retirement or any other objective, don't take the advice of anyone participating in these forums or any similar forums.
If you need help planning an investment strategy, seek out a Certified Financial Planner. They have passed a rigorous exam to become a CFP. Most importantly, they work on a fee basis. They don't sell anything.
I have read your posts for years. You are a bright guy. Investing is not rocket science. I’d bet you could master the basics with a bit of effort. Spend a little time on investing and take charge of your investment strategy.
JPS1When laying out an investment plan for retirement or any other objective, don't take the advice of anyone participating in these forums or any similar forums.
Safe advice.
The important thing is to save something. Many lose track of that basic tenet.
Reminds me of a cartoon. Older gentleman is obviously at a bank, applying for a loan. The caption reads something along the lines of "the car and boat are to attract a younger woman who can take care of me in my old age..."
https://evanstonroundtable.com/2021/06/17/metra-announces-updated-pilot-schedule-for-union-pacific-north-line/
JPS1If you need help planning an investment strategy, seek out a Certified Financial Planner. They have passed a rigorous exam to become a CFP. Most importantly, they work on a fee basis. They don't sell anything.
JPS is caught up in certifications and like software certifications, professional certifications can mean nothing and you can end up with an absolute idiot. So be careful here. JPS is also wrong on CFP's not selling you anything as some work on commission. My Mother had a CFP with Wells Fargo that rode her portfolio down to 1/3 value in 2008 and recommended in 2008 she sell everything and invest in zero coupon CD's, she was on commission and liked to churn the account. Going with a CFP Fudiciary like those with Fisher Investments over someone on Commission does make sense though.....which I think is what JPS1 was aiming for here. Same goes with CPA's there are some idiot CPA's out there. Don't stop your research at the certification.
JPS1I’d bet you could master the basics with a bit of effort. Spend a little time on investing and take charge of your investment strategy.
Good plan. Motley Fool is a good service for $200 a year. Seems expensive but will pay for itself. Basically with a good CFP Fiduciary your making all the decisions yourself anyway and the CFP is just a coach to keep you out of trouble. Self education is good because you have to take responsibility here and be comfortable with where you put your money in order to be comfortable with the CFP. Though I will also say I do not have a CFP now and he is a hell of alot more saavy and smarter than any CFP I have interviewed myself. And I went through a lot of them. So for example if you make a large stock gain, your financial advisor should step up and tell you how to lock in the gain and diversify it so that you keep the majority of the gain with the future reinvestment and not blow it all on future high risk investments. Basically a coaching role. That is an example of how the relationship should work. If he/she says "buy gold".....run like hell as that should be your initiative or call with his or her input only after you laid out the decision.
Also set minimum performance objectives and let whomever the advisor is know that you will not accept returns below 7% averge annual. Even with down turns it should average out to 7% at a min over the years with the good years thrown in, though I will say I have been double digits growth every year but 2007-2008 slide. So 7% is a min that 80-90% should be able to meet.
SD60MAC9500SD60MAC9500 wrote the following post 10 hours ago: https://evanstonroundtable.com/2021/06/17/metra-announces-updated-pilot-schedule-for-union-pacific-north-line/
I wonder how much of the METRA commute is reverse commute, is it up to 50% now?
CMStPnP It's all about diversification and spreading your risk. The MCI and Enron collapses hit home close. ... Easy to diversify enough with just 2-3 stock holdings, especially if they are reputible multi-national corporations
Hopefully one of those 3 stocks wasn't GM a dozen years ago. Most advice I have read suggests 10 or 20 deversified stocks (spread out in a number of industries). All companies should be researched, and reviewed periodically if change is needed. For those who don't want to closely follow the marked as an advocation, low fee index funds are recommended. (Google search: S&P 500)
My wife and I have all of our investments in Fidelity. Until three years ago, I managed them but now they do. We are considered "Wealth Management" clients. Mutual Funds have worked just fine for us. We can comfortably spend yearly more than we ever have, even more than while working.
CMStPnP If you have a rollover IRA that you control free and clear, individual stocks are the way to go. Easy to diversify enough with just 2-3 stock holdings, especially if they are reputible multi-national corporations like 3M, Proctor and Gamble, etc. Also, always have the dividend reinvestment option turned on.....at least that is what I do.
.
...
On second thought........throwing in the towel on this discussion. Not my issue to fix, I am already past the finish line with 10 more years to work (optionally). :)
Our community is FREE to join. To participate you must either login or register for an account.