12 Best Safe Dividend Stocks for 2025

6. Union Pacific Corporation (NYSE:UNP)

Number of Hedge Fund Holders: 78

5-Year Average Payout Ratio: 46.6%

Union Pacific Corporation (NYSE:UNP) is a Nebraska-based transport company that operates railroads, connecting 23 states. In the third quarter of 2024, the company posted revenue of $6.01 billion, which shows a 1% increase from the same quarter the previous year. Freight revenue, excluding fuel surcharges, rose by 5%, driven by a 6% increase in revenue carloads. The company’s operating income grew by 11%, reaching $2.4 billion.

Railroads offer a highly efficient method for transporting goods over land, with Union Pacific Corporation (NYSE:UNP) being pivotal in the movement of various bulk commodities. This diverse revenue base helps stabilize its income, though the company’s performance remains tied to economic cycles. When the economy thrives, demand for products such as agricultural goods, industrial materials, and energy rises, boosting the need for the company’s services. Conversely, during economic downturns, demand for these goods declines. Despite these cyclical changes, railroads generally sustain strong operating margins regardless of the economic environment.

In addition to strong financial results, Union Pacific Corporation (NYSE:UNP) also demonstrated a strong cash position. For the first nine months of the year, it reported an operating cash flow of $6.7 billion, up from $5.9 billion in the same period last year. Free cash flow saw a notable increase, climbing to $1.8 billion from $955 million the previous year. The company has a long history of rewarding shareholders, having paid uninterrupted dividends for 125 years and growing its payouts for 18 consecutive years, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $1.34 per share and has a dividend yield of 2.36%, as of January 13.

As per Insider Monkey’s database of Q3 2024, 78 hedge funds owned stakes in Union Pacific Corporation (NYSE:UNP), compared with 82 in the previous quarter. These stakes are collectively valued at over $4.4 billion.