<div id="readability-page-1"><div><div><p>Prospects of the Zacks Transportation - Rail industry’s participants are being weighed down by challenges like tariff-induced economic uncertainties, persistent inflation and concerns pertaining to lingering supply-chain disruptions. Geopolitical woes represent further challenges. Most industry players are looking to drive their bottom line amid the headwinds through cost reduction.</p><p>Partly due to these headwinds, the industry has underperformed the Zacks S&amp;P 500 Composite as well as the Zacks Transportation sector over the past six months. Over this period, the industry has gained 3.2% compared with the S&amp;P 500 Index’s northward movement of 15% and the broader sector’s surge of 9%.</p><h2>Six-Month Price Performance</h2><figure><div><div><p><img src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/71kmQkpXbBIY8KzzmB1mAA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTYxNQ--/https://media.zenfs.com/en/zacks.com/538a40626a53e73e97cc9a6706a36198?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="397" original-src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/71kmQkpXbBIY8KzzmB1mAA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTYxNQ--/https://media.zenfs.com/en/zacks.com/538a40626a53e73e97cc9a6706a36198"/></p></div></div><p></p><figcaption>Zacks Investment Research</figcaption><p></p></figure><p><span>Image Source: Zacks Investment Research</span></p><p>Despite the challenges surrounding the industry, some railroad companies, like <strong>Union Pacific Corporation (</strong>UNP<strong>) </strong>and <strong>Canadian National Railway Company</strong> CNI, have consistently paid dividends to their shareholders, thus highlighting their pro-shareholder stance.</p><p>Dividend growth stocks generally belong to mature companies, which are less susceptible to significant market swings, and act as a hedge against uncertainty-induced stock market volatility, as is the case currently. They offer downside protection with their consistent increase in payouts.</p><p>Additionally, these companies generally have strong fundamentals like a sustainable business model, a long track of profitability, rising cash flows, good liquidity and a strong balance sheet.</p><h2>How to Pick Stocks With Solid Dividend Payouts?</h2><p>Investing in dividend stocks is a prudent strategy that offers a dual advantage: steady income and a cushion against market volatility. It's no wonder investors actively seek companies with a consistent and growing dividend history. These stocks provide a reliable income stream, acting as a buffer during market downturns and contributing to overall portfolio stability.</p><p>To guide investors interested in the railroad industry, we came up with certain parameters using the Zacks Stocks Screener. We shortlisted transportation stocks based on the following:</p><p>a) <strong>A dividend payout ratio of less than 60%</strong> (the dividend payout ratio — dividends paid/net income — gives the proportion of earnings paid out as dividends to shareholders. A payout ratio below 60 looks quite sustainable).</p><p>b) <strong>A dividend yield of greater than 2% </strong>(dividend yield denotes the percentage of a company’s share price that it shells out as dividends annually).</p><p>The selected stocks have exhibited dividend growth in the past five years, apart from currently carrying a Zacks Rank #3 (Hold). You can see <strong>the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here</strong>.</p><p><strong>Union Pacific</strong>: Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $138.94 billion.</p><p>UNP’s quarterly dividend of $1.38 ($5.52 annualized) per share, which gives it a 2.36% yield at the current stock price. The company’s payout ratio is 47% of its earnings at present. The five-year dividend growth rate is 6.44%. (Check Union Pacific’s dividend history here).</p><h3>Union Pacific Corporation Dividend Yield (TTM)</h3><figure><div><div><p><img src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/V12Hf8On9W4EhDQOGzEgrg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTQ0Nw--/https://media.zenfs.com/en/zacks.com/e03cd8b7b17ebb681eaab916b8490b23?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="537" height="250" original-src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/V12Hf8On9W4EhDQOGzEgrg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTQ0Nw--/https://media.zenfs.com/en/zacks.com/e03cd8b7b17ebb681eaab916b8490b23"/></p></div></div><p></p><figcaption>Union Pacific Corporation Dividend Yield (TTM)</figcaption><p></p></figure><p>Union Pacific Corporation dividend-yield-ttm | Union Pacific Corporation Quote</p><p>UNP has paid dividends on its common stock for 126 consecutive years, reflecting its pro-shareholder approach. Union Pacific’s consistent initiatives to reward its shareholders through dividends and share repurchases look encouraging. In 2022, UNP paid dividends worth $3.16 billion and repurchased shares worth $6.28 billion. In 2023, the company returned $3.9 billion to its shareholders through dividends ($3.2 billion) and buybacks ($0.7 billion). During 2024, UNP paid $3.21 billion in dividends and repurchased shares worth $1.50 billion. During the first nine months of 2025, UNP paid $2.42 billion in dividends and repurchased shares worth $2.68 billion.</p><p><strong>Canadian National</strong>: Based in Montreal, Canada, Canadian National is involved in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. Currently, CNI has a market capitalization of $60.43 billion.</p><p>CNI’s quarterly dividend leads to $2.53 per share (annualized), which gives it a 2.58% yield at the current stock price. This company’s payout ratio is 50% of its earnings at present. The five-year dividend growth rate is 6.69%. (Check Canadian National’s dividend history here).</p><h3>Canadian National Railway Company Dividend Yield (TTM)</h3><figure><div><div><p><img src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/b0pu5cFTizC31G0crGI8mg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTQ1Mg--/https://media.zenfs.com/en/zacks.com/1e578419021debc36742a0551a5260ab?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="537" height="253" original-src="https://imageproxy.pbkrs.com/https://s.yimg.com/ny/api/res/1.2/b0pu5cFTizC31G0crGI8mg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTQ1Mg--/https://media.zenfs.com/en/zacks.com/1e578419021debc36742a0551a5260ab"/></p></div></div><p></p><figcaption>Canadian National Railway Company Dividend Yield (TTM)</figcaption><p></p></figure><p>Canadian National Railway Company dividend-yield-ttm | Canadian National Railway Company Quote</p><p>CNI’s consistent efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2.00 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During 2024, CNI paid dividends of C$2.14 billion and repurchased shares worth C$2.60 billion.</p><p>During the first nine months of 2025, CNI paid dividends of C$1.66 billion and repurchased shares worth C$1.47 billion. Under its current Normal Course Issuer Bid (“NCIB”), CNI may repurchase up to 20.0 million common shares between Feb. 4, 2025, and Feb. 3, 2026. As of Sept. 30, 2025, CNI had repurchased 9.9 million common shares for $1.32 billion under its current NCIB.</p><p>Such shareholder-friendly moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.</p><p>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report</p><p>Union Pacific Corporation (UNP) : Free Stock Analysis Report</p><p>Canadian National Railway Company (CNI) : Free Stock Analysis Report</p><p>This article originally published on Zacks Investment Research (zacks.com).</p><p>Zacks Investment Research</p></div></div></div>

<p>The article highlights Union Pacific (UNP) and Canadian National Railway (CNI) as reliable dividend-paying stocks in the railroad industry. Despite challenges like economic uncertainties and inflation, these companies have a solid five-year dividend growth history, offering steady income and market volatility protection. UNP and CNI have sustainable payout ratios and yields above 2%, making them attractive for investors seeking stable returns. Both companies have consistently rewarded shareholders through dividends and buybacks, demonstrating strong financial health and commitment to shareholder value.</p>

2 Dividend Paying Stocks From the Railroad Industry You Should Count On