Union Pacific Corporation (NYSE:UNP) also has a higher valuation. It is trading at $159.40 per share, with the total market cap of $73.90 billion. The market values Union Pacific at 9.3 times its trailing EBITDA. Union Pacific has a much broader freight revenue mix than the other two companies. Intermodal, industrial and coal businesses, each accounted for 19% of the total revenue while agriculture and chemical business accounted for 15% and 17%, respectively, of the total sales. Because of the broader diversified revenue stream, the flat volume of the coal business and the declining volume of the intermodal and the agriculture business were offset by the growing volume of the chemical and the automotive businesses.
For the full year, with the assumption of an improving economy, Union Pacific Corporation (NYSE:UNP) will enjoy positive volume growth with the continued gains in real core pricing. With the growing returns and increasing shareholder value, the company could increase its return to shareholders. The company expects to experience slight volume increase by the end of the year, including pricing gains and the growing profitable revenue. Union Pacific offers the lowest dividend yield at 1.70% to shareholders.
My Foolish take
Transportation is a cyclical business, with performance fluctuating along with the general economy. With the decent balance sheet strength, low valuation, consistent growing dividend payments and nice dividend yield, CSX Corporation (NYSE:CSX) seems to be a good pick for long-term shareholders on the improving economy.
Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article This Transportation Business Is a Good Pick Now originally appeared on Fool.com.
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