Union Pacific Corp. (UNP) boosted its quarterly dividend 25%, joining a long list of companies that have raised their payouts of late in an effort to return cash to shareholders.
"We're generating record free cash flows and have confidence in our ability to capitalize on future growth opportunities and reward our shareholders," Chairman and Chief Executive Jim Young said.
A rebounding economy helped grow volumes in all Union Pacific's major freight segments last quarter, though higher fuel costs have crimped earnings.
The payout, raised to 47.5 cents a share from 38 cents, will cost the railroad operator about $185 million more each year.
The company raised its dividend twice last year amid improving conditions in the rail sector and for freight haulers in general.
Shares were recently up 1.3% to $101.86 Thursday, ahead of the broader market.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com