Covered, but not compounding — flat since 2022. A 1.64% yield on a 45.28% trailing payout is covered, but the dividend has not grown since it was raised to $1.35 in late 2022 — four years flat while the pending Union Pacific combination hangs over the standalone company. Q3 2026 earnings beat estimates ($3.62 vs. $3.46 expected) and revenue rose 13.6% year over year, so coverage is not the problem; growth is.
Key risk: The pending Union Pacific merger — still under Surface Transportation Board review, with a decision timeline running into 2027, so the standalone dividend story could end in a combination rather than a raise.
Changes if: The payout pushes well past 45.28%, or the dividend stays flat into a fifth year. A raise, or merger terms that preserve the income stream, would change the verdict.
- ✓Payout-coverage check: 45.28% of trailing earnings — $5.40 indicated against a $329.99 close on Oct. 23, 2026. Covered, with more than half of earnings retained.
- ✓Yield check: 1.64% indicated — $1.35/qtr × 4 at the $329.99 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- !Dividend growth check: No increase since the quarterly dividend was raised to $1.35 in late 2022; every payment since, including the one declared Oct. 21, 2026, has been $1.35. Covered, but not compounding.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.