Recent Buy – UNP, BLK, ADM

On January 21, I initiated a position in Pacific Union (UNP). Specifically I purchased 46 shares at $69 per share with a $1 commission. The entry yield on cost is 3.19% and this new position is expected to generate $101.20 gross dividend income.

According to Google Finance, Union Pacific Corporation operates through its principal operating company, Union Pacific Railroad Company. The Company is a Class I railroad operating in the United States, which has 31,974 route miles and maintains coordinated schedules with other rail carriers to move freight. It links 23 states in the western two-thirds of the country by rail, providing a supply chain link around the world. Its business mix includes agricultural products, automotive, chemicals, coal, industrial products and intermodal. The Company serves United States population centers, operates from West Coast and Gulf Coast ports to eastern gateways, connects with Canada’s rail systems and serves six Mexico gateways. The Company’s freight traffic consists of bulk, manifest, and premium business.

Union Pacific operates the longest network of railroad track in the US, with over 32,000 miles. 2013 freight revenues are derived by Intermodal (20%), Agricultural (16%), Autos (10%), Chemicals (17%), Coal (19%), Industrial Products (18%).

UNP has raised dividends for 10 years in a row by 20.30% per year on average . The most recent dividend increase was in February 2015, when the Board of Directors approved a 10% increase in the quarterly dividend to 55 cents/share. Therefore  I expect  UNP will raise its quarterly dividend some time soon. 

Given the historical yield of UNP above, my entry yield of 3.19% (if my calculation is right) is quite a bargain.

In addition, I made the following purchases.

On January 21, 6 shares of BlackRock (BLK) at $294.2125 per share with $1 commission. The total number of BLK shares in my portfolio has become 12 with 2.91% YOC.

On the same day, 60 shares of Archer-Daniels-Midland(ADM) at $31.5 per share with $27 commission. With this purchase, my ADM position has become 140 shares with 3.16% YOC.

Disclosure: Long UNP, BLK, ADM