Burlington Northern Delivers Big Dividend For Berkshire (BRK.A, UNP, CSX, NSC, CP, CNI, BRK.B)

Tickerspy’s Railroad Index

RAILROAD INVESTING IDEAS

• Popular long ideas: CSX, UNP, NSC
• Popular short ideas: NSC, CSX, TRN
• Top dividend plays: ARII, NSC, GMT
• Pro favorites: UNP, CNI, NSC

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RAILROAD COVERAGE

These firms transport goods via the rails

• Railroad Stocks Keep Chugging Along (GBX, CSX, UNP, NSC, CP, CNI)
• Working On The Railroad: Buffett Adds Jobs After 2009 Cuts (BRK.A, GBX, UNP, GE, CMCSA, TMK, BAC, BRK.B)
• Buffett Sector Surges After CSX Report (CSX, GBX, GWR, CP, UNP, CNI, BRK.A, BRK.B, NSC)

RAILROAD CHART

RAILROAD METRICS

Avg. Market Cap:	$15.0B
Avg. P/E Ratio:	22.6
Avg. Div Yield:	1.4%

Warren Buffett’s Berkshire Hathaway invests in plenty of stocks that pay dividends, but the company has also received $2.25 billion in dividends since acquiring railroad operator Burlington Northern Santa Fe in February 2010. That’s almost triple the railroad’s payout rate prior to Berkshire Hathaway’s (BRK.A, BRK.B) purchase of the company, according to Bloomberg News.

Burlington Northern paid a $1 billion dividend last month and $1.25 billion last year, Bloomberg reported. For the comparable time frame prior to being acquired by Berkshire, Burlington Northern Santa Fe paid a dividend of just $772 million.

Other railroad operators have raised their dividends and resumed or started share repurchase plans, perhaps catalysts that have helped the Railroad Stocks Index to a gain of 30% in the past six months.

Union Pacific (UNP) raised its dividend last year and bought back $1.25 billion of its own shares. In September, Florida-based CSX (CSX) raised its quarterly dividend to 26 cents from 24 cents, good for the eighth dividend increase by the company in the past five years. In January, Norfolk Southern (NSC) raised its quarterly payout to 40 cents from 36 cents.

Canadian Pacific Railway (CP) raised its dividend in May 2010 while rival Canadian National Railway (CNI) boosted its payout in January.

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Tags: BRK-A, BRK-B, CNI, CP, CSX, NSC, UNP