Another sector
Industrial manufacturing and transportation are affected by changing technology. Technology, in theory, is used to enhance the service, desirability, efficiency and safety of planes, trains and automobiles. My favorite in this sector is Union Pacific Corporation (NYSE:UNP).
Union Pacific Corporation (NYSE:UNP) has several core advantages including free land from the government when the railroad was founded. UP’s real estate — some was acquired through acquisitions — covers 32,000 route miles in 23 states in the western two-thirds of the United States. It is virtually impossible for someone to acquire the land and build a competitor with faster route miles through the same geography.
There are other railroad competitors, but Union Pacific Corporation (NYSE:UNP) is the superior railroad with a healthy mix of freight — merchandise, chemicals, grains and raw materials — being moved daily. The crude-by-rail play continues to benefit UP.
With strong earnings so far this year, Union Pacific Corporation (NYSE:UNP) was able to raise its third-quarter dividend to $0.79 per share, or 14.5% more than the $0.69-per-share payout to investors made last quarter. The regular dividend payment equates to a $3.16-per-share annual dividend, yielding 1.9% on a $162 stock.
The railroad’s three biggest risks are the economy, accidents and flooding, which can destroy track and bridges. A declining economy forces the railroad to cut expenses. During the Great Depression of the 1930s, several railroads put workers on part-time status to survive. Some railroad workers were laid off during the recession of 2008-09, but most have been called back and railroads are hiring again.
Foolish bottom line
If you are worried about your stock being replaced by a new form of technology, buy stocks in companies that are virtually impossible to duplicate and will likely be around many years from now. Hershey Co (NYSE:HSY), The Coca-Cola Company (NYSE:KO) and Union Pacific Corporation (NYSE:UNP) each have been around over 100 years and will likely be around another 100 years. All three have been able to raise prices without losing customers. All three stocks have long histories of raising dividends. Buy and hold these stocks for life. They probably will outlive you.
The article Three Stocks That Won’t Be Replaced by the iPhone originally appeared on Fool.com and is written by Michael Hooper.
Michael Hooper owns shares of Coca-Cola, Union Pacific, and The Hershey Company. The Motley Fool recommends Coca-Cola. Michael is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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