10 Best Affordable Dividend Stocks to Buy According to Hedge Funds

7. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 93

Forward P/E Ratio as of February 26: 20.53

An American railroad holding company, Union Pacific Corporation (NYSE:UNP) transports a wide range of products and commodities, providing it with broad exposure across multiple industries. This diversification helps cushion the impact of slowdowns in any one market segment. The company has enhanced its key operational systems, such as Positive Train Control (PTC), Computer-Aided Dispatch (CADx), and Transportation Management (NetControl), to strengthen safety measures. In addition, it has implemented Precision Gate Technology (PGT), which streamlines entry and exit at ramps and provides a seamless rolling-gate experience for drivers, cutting down the time required for container drop-offs and pickups.

In the fourth quarter of 2024, Union Pacific Corporation (NYSE:UNP) posted revenue of $6.12 billion, reflecting a 1% decline from the prior year. However, a 5% increase in revenue carloads helped offset some of the weakness. The company’s operating ratio improved to 58.7%, marking a 220-basis-point enhancement, despite a 70-basis-point impact from the ratification of a crew staffing agreement. Moreover, operating income rose 5% to $2.5 billion.

On February 6, Union Pacific Corporation (NYSE:UNP) announced a quarterly dividend of $1.34 per share, maintaining its previous payout. The stock supports a dividend yield of 2.18%, as of February 26. The company remained financially strong in FY24, generating over $9.3 billion in operating cash flow and ending the quarter with more than $1 billion in cash and cash equivalents. This stability has enabled Union Pacific to pay dividends consistently for 125 years and raise its payouts annually for the past 18 years, which makes it one of the best dividend stocks on our list.