Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” fourth-quarter investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the US equity market continued to rally, largely fueled by enthusiasm for artificial intelligence. The Enhanced Equity Income Strategy returned 2.0% (net) for the fourth quarter and 7.5% (net) for the year, compared to 6.5% and 8.9% from its primary benchmark, the S&P 500 Buy/Write Index, and 1.4% and 8.7% for its secondary benchmark, the SPDR Barclays High Yield Bond ETF (JNK), respectively. The Strategy’s total return was significantly affected by investors’ disregard for high-dividend and low-volatility factors, as well as an equity market that failed to expand across sectors. The Strategy anticipates a positive economic outlook for 2026, driven by the Federal Reserve’s interest-rate cuts, tax reductions, capital-expenditure bonus depreciation (OBBBA), and potential lower tariffs, all contributing to growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks like Union Pacific Corporation (NYSE:UNP). Union Pacific Corporation (NYSE:UNP) is a railroad holding company that operates through its subsidiary Union Pacific Railroad Company. On February 27, 2026, Union Pacific Corporation (NYSE:UNP) stock closed at $264.98 per share. One-month return of Union Pacific Corporation (NYSE:UNP) was 12.65%, and its shares gained 7.80% over the past 52 weeks. Union Pacific Corporation (NYSE:UNP) has a market capitalization of $157.237 billion.
SCCM Enhanced Equity Income Fund stated the following regarding Union Pacific Corporation (NYSE:UNP) in its fourth quarter 2025 investor letter:
“Union Pacific Corporation (NYSE:UNP) is one of North America’s largest Class I railroads, operating a premier network across the western two-thirds of the United States that connects key ports, industrial hubs, and population centers. The company benefits from a structurally advantaged network with long haul lengths, dense freight mix, and strong exposure to intermodal, industrial, and agricultural end markets, supporting durable pricing power and margin potential. A key catalyst is the increasing likelihood and growing investor focus on the proposed transcontinental merger with Norfolk Southern, which offers a clear path to meaningful revenue synergies, cost efficiencies, and an accelerated earnings growth profile. Even on a standalone basis, Union Pacific is positioned for continued operating ratio improvement driven by labor productivity gains, network efficiency initiatives, and catch-up pricing as contracts reset. Management’s execution track record and robust free cash flow generation provide flexibility for capital returns while continuing to invest in service and reliability. As merger clarity improves, the market is likely to re-rate the shares to reflect a differentiated long-term growth opportunity and enhanced earnings power. Overall, Union Pacific combines high-quality assets, visible operational momentum, and compelling strategic optionality that support an attractive investment outlook. The stock trades at 18x forward earnings and offers a 2.4% dividend yield.”
Union Pacific Corporation (NYSE:UNP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 106 hedge fund portfolios held Union Pacific Corporation (NYSE:UNP) at the end of the fourth quarter, up from 99 in the previous quarter. While we acknowledge the risk and potential of Union Pacific Corporation (NYSE:UNP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Union Pacific Corporation (NYSE:UNP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Union Pacific Corporation (NYSE:UNP) and shared a list of best low volatility dividend stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
