Along with Union Pacific, we also looked at Guangshen Railway Co. Ltd. (NYSE: GSH), Norfolk Southern Co. (NYSE: NSC), CSX Corp. (NYSE: CSX), Canadian National Railway Co. (NYSE: CNI), and Canadian Pacific Railway Ltd. (NYSE: CP). Here’s how they stack up on the basis of dividend yield:

• Guangshen Railway  pays $0.51 for a 2.5% yield;
• Norfolk Southern pays $1.44 for a 2.3% yield;
• CSX Corp. pays $1.04 for a 1.7% yield;
• Canadian National pays $1.07 for a 1.7% yield;
• Union Pacific pays $1.52 for a 1.7% yield;
• Canadian Pacific pays $1.05 for a 1.6% yield.

There is an obvious here… more dividend raises could be on the way, if the railroads want to maintain current investor yields going forward.

Buffett’s own Burlington Northern Railway has boosted shares in Berkshire Hathaway Inc. (NYSE: BRK-A; BRK-B), but the company does not pay dividends.

Not everyone sees a silver lining in railroad stocks. Goldman Sachs today downgraded Norfolk Southern from ‘Hold’ to ‘Sell’ and lowered the company’s target share price from $62 to $59. The stock is trading at over $61/share so far today. Goldman cited higher costs, smaller price increases, a negative view on coal shipments from Appalachia, and declining intermodal traffic as reasons for the downgrade.  Goldman could be right, but strength in railroad stocks has been building and all the stocks we’ve looked at are priced well below their mean targets.

Paul Ausick

American Electric Power Co., Inc. (NYSE: AEP) Cut to Hold at Jefferies.
Apple Inc.  (NASDAQ: AAPL) Reiterated Buy but target raised to $385 from $340 at Barclays.
Apollo Group Inc. (NASDAQ: APOL) Started as Neutral at UBS.
Canadian National Railway Co. (NYSE: CNI) Cut to Hold at Stifel Nicolaus.
CNOOC Ltd. (NYSE: CEO) Cut to Neutral at HSBC.
EI DuPont de Nemours & Co. (NYSE: DD) Raised to Buy at BofA/Merrill Lynch.
Family Dollar Stores, Inc.(NYSE: FDO) Raised to Strong Buy at S&P Equity Research (late Monday call).
FLIR Systems, Inc. (NASDAQ: FLIR) Reiterated Buy at Needham.
Kulicke & Soffa Industries Inc. (NASDAQ: KLIC) Cut to Hold at Jefferies.
Liz Claiborne Inc. (NYSE: LIZ) Started as Neutral at SunTrust.
Turkcell Iletisim Hizmetleri AS (NYSE: TKC) Cut to Underweight at Morgan Stanley.
Verizon Communications Inc. (NYSE: VZ) Cut to Underperform at Bernstein.
Wynn Resorts Ltd. (NASDAQ: WYNN) Cut to Market Perform at BMO; Raised to Buy at S&P Equity Research (late Monday call).
YRC Worldwide, Inc. (YRCWD) Started as Underperform at Morgan Keegan.

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JON C. OGG

Canadian National Railway Company (NYSE: CNI) Cut to Sector Peform at CIBC.
Celgene Corporation (NASDAQ: CELG) Cut to Hold at Jefferies.
First Solar Inc. (NASDAQ: FSLR) maintained sell but raised estimates on orders at Soleil.
J.C. Penney Company (NYSE: JCP) Raised to Conviction Buy List and target raised to $37 at Goldman Sachs.
MGM Mirage (NYSE: MGM) Cut to Sell at Soleil.
Potash Corp. of Saskatchewan (NYSE: POT) Target to $150 (Canadian) at Scotia.
QUALCOMM Inc. (NASDAQ: QCOM) Started as Underperform at BNP Paribas.
Synaptics Inc. (NASDAQ: SYNA) Cut to Sell at Lazard.
Texas Instruments Inc. (NYSE: TXN) Started as Outperform at BNP Paribas.
Williams-Sonoma Inc. (NYSE: WSM) Raised to Outperform at Oppenheimer.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Kinross Gold Corporation (NYSE:KGC)
EnCana Corporation  (NYSE:ECA)
TransCanada Corporation  (NYSE:TRP)
Canadian National Railway Company  (NYSE:CNI)
BCE Inc.   (NYSE:BCI)
Royal Bank of Canada   (NYSE:RY)
Thomson Reuters Corporation  (NYSE:TRI)
Husky Energy Inc.  
Shoppers Drug Mart Corporation  
Potash Corporation of Saskatchewan Inc.   (NYSE:POT)
Rogers Communications Inc.  (NYSE:RCI)

US companies aren’t the only ones with pay issues.

Douglas A. McIntyre

Cascade Investment, L.L.C.
COMPANY (TICKER)                              $(000)       SHARES
AUTONATION INC (AN)                      111,799   11,315,688
BERKSHIRE HATHAWAY (BRK-A)  391,230   4,050
CANADIAN NATL RY (CNI)           1,279,599   34,809,544
COCA-COLA FEMSA (KOF)                  37,294     857,128
EASTMAN KODAK (EK)                         52,311    7,950,000
FOMENTO ECONOMICO  (FMX)       678,431   22,516,795
GRUPO TELEVISA (TV)                       301,495   20,180,400
OTTER TAIL CORP (OTTR)                  79,474    3,406,499
PNM RES INC (PNM)                             70,757    7,019,550
REPUBLIC SERVICES (RSG)              879,233   35,467,230

Smaller positions listed as under $50 million for the BILL & MELINDA GATES FOUNDATION are BANK FLA CORP NAPLES, VIACOM, COCA COLA ENTERPRISES, COX RADIO, CROCS INC, DAIMLER, DICKS SPORTING GOODS, EASTMAN KODAK, GREATER CHINA FUNDD INC, HOME DEPOT, IAC/INTERACTIVE CORP, ELI LILLY & CO, PEABODY ENERGY, PROGRESSIVE CORP, SEATTLE GENETICS, TEVA PHAMRACEUTICAL, TRACTOR SUPPLY, VIACOM…. We listed Republic Services (RSG) because Bill Gates’ Cascade has been acquiring these share actively via Cascade.

Smaller positions listed as under $50 million for CASCADE INVESTMENTS are CROCS, FISHER COMMUNICATIONS, GAMCO INVESTORS, PATRIOT COAL, PLANETOUT INC, SIX FLAGS, STRATEGIC HOTELS & RESORTS.

JON C. OGG
FEBRUARY 17, 2009

• Apollo Investment (AINV) Cut to Neutral at JPMorgan.
• Baker Hughes (BHI) Cut to Underweight at Morgan Stanley.
• Canadian National Railway (CNI) Cut to Neutral at Goldman Sachs.
• Elizabeth Arden, Inc. (RDEN) Cut to Market Perform at Wachovia.
• Kansas City Southern (KSU) Cut to Neutral at JPMorgan.
• Palm (PALM) Cut to Neutral at JPMorgan.
• Polo Ralph Lauren (RL) Cut to Sell at Goldman Sachs.
• Red Robin Gourmet (RRGB) Cut to Equal Weight at Morgan Stanley.
• Smith International (SII) Cut to Equal Weight at Morgan Stanley.
• Teradyne (TER) Cut to Perform at Oppenheimer.

Jon C. Ogg
January 20, 2009

• AUTONATION (NYSE: AN)                                5,263,588
• BERKSHIRE HATHAWAY (NYSE: BRK-A)         4,050
• CANADIAN NATL RY (NYSE: CNI)                     33,859,544
• COCA COLA FEMSA S A B (NYSE: KOF)         857,128
• FISHER COMMUNICATIONS (NASDAQ: FSCI)  455,700
• FOMENTO ECONOMICO (NYSE: FMX)             20,966,795
• GAMCO INVESTORS (NYSE: GBL)                  90,845
• GRUPO TELEVISA SA (NYSE: TV)                  19,680,400
• OTTER TAIL (NASDAQ: OTTR)                         2,556,499
• PATRIOT COAL (NYSE: PCX)                          2,408,653
• PLANETOUT (NASDAQ: LGBT)                        521,739
• PNM RESOURCES (NYSE: PNM)                    7,019,550
• REPUBLIC SERVICES (NYSE: RSG)               34,873,836
• SIX FLAGS (NYSE: SIX)                                   10,210,600
• STRATEGIC HOTELS & RESORT (NYSE: BEE) 4,190,000

You can join our open email distribution list to hear about holdings of Warren Buffett, Bill Gates, IPO’s, secondary offerings, private placements, merger, special situations, rumors, and more.

Jon C. Ogg
November 14, 2008

Other substantial Gates stock holdings outside the US are GrupoTelevisa SA (NYSE: TV) with 19.68 million shares worth almost $465million and a stake of 13.31 million shares of Fomento EconmicoMexicano, S.A.B de C.V (NYSE: FMX) worth about $605 million.  If hekeeps contributing to those investments he’s going to be called GringoGates rather than Garbage Man Gates.

But the one standout stock he has been steadily adding to is innersecret dream he never got to pursue because of his infatuation with "0"and "1" and programming: he must really have wanted to become a garbageman.  Yep, Bill Gates has steadily added to his position in RepublicServices Inc. (NYSE: RSG).  As of June 30 he owned 27.192+ millionshares worth some $807.6 million at the time.  But in more recenttransactions he has actually added to these.  With the last filing thatcame out tonight he now owns just under 31.4 million shares, whichcomes to 17.3% of the company.  The last round of purchases was 680,000shares with an average price of $34.83 for these buys.  There wasanother filing Wednesday showing he had bought 1.35 million othershares at an average price of $34.89.

What is more important than anything is that Mr. Gates is investingright into the tempest of a merger.  Waste Management Inc. (NYSE: WMI)has just recently hiked its unsolicited offer to acquire RepublicServices by 9% to $37.00 per share.  This is also a torpedo againstRepublic’s $6+ Billion deal to acquire Allied Waste Industries Inc.(NYSE: AW).

Regardless of how these mergers actually go, Mr. Gates may have wiggledhis way into a garbage, trash, and waste management monopoly after thedust settles.  Who knows, he might even get involved in the merger anddemand that his shares convert to new stock in the garbage monopolyrather than just taking the cash back if that pans out.

Don’t forget to check out what his new best buddy Warren Buffett is doing with his billions of Berkshire investment monies.

Jon C. Ogg
August 14, 2008

Company (Ticker)                                                  Value                 Shares
Berkshire Hathaway (NYSE: BRK-A)             $573,480,000       4,050
Canadian National Rail (NYSE: CNI)           $1,589,028,000     33,859,544
Fisher Communications (NASDAQ: FSCI)  $17,298,000          455,700
Fomento Econmico Mexicano (NYSE: FMX)$412,617,000        10,810,000
Grupo Televisa S.A. (NYSE: TV)                      $467,803,000       19,680,400
Otter Tail Corp. (NASDAQ: OTTR)                  $88,455,000          2,556,499
PlanetOut Inc. (NASDAQ: LGBT)                    $3,240,000             521,739
PNM Resources Inc. (NYSE: PNM)               $150,569,000         7,019,550
Republic Services Inc. (NYSE: RSG)            $852,483,000         27,192,451
Six Flags, Inc. (NYSE: SIX)                              $20,728,000           10,210,600

If you want to see Mr. Gates’ new best friend’s holdings (that would be Warren Buffett) you can see all of those here for the same period.

Or you can see Carl Icahn’s top equity holdings as well.

Jon C. Ogg
February 16, 2008

• primarily reflects the rapidly rising diesel fuel costs and the corresponding lag in fuel surcharge recoveries;
• it has been experiencing softer than anticipated volumes in recent weeks, which are largely related to recent weather events.

Union Pacific is now forecasting fourth quarter earnings in a range of $1.70 to $1.80 per diluted share, down from its prior forecast of $1.90 to $2.00 per diluted share. Full year 2007 earnings expectations are also impacted and are now in the range of $6.76 to $6.86 per diluted share.  UNP is quick to point that this represents more than 14% increase versus 2006 earnings of $5.91 per share.

Fourth quarter 2007 diesel fuel costs should average roughly $2.60 per gallon. This would be a 34% increase from last year’s fourth quarter level. It stated that diesel fuel costs averaged $2.43 per gallon in the month of October, increased to an average of $2.66 per gallon in November and are expected to be over $2.70 per gallon in December.  Fuel costs for the fourth quarter are now expected to be over $200 million higher than the fourth quarter a year ago. In November and December alone, fuel costs will be approximately $65 million higher than originally anticipated.

UNP notes that the fuel surcharges on these higher costs will not be recovered until 2008 as there is roughly a two month lag in the Company’s fuel surcharge programs between diesel fuel expense and surcharge recovery.  Warren Buffett’s Berkshire Hathaway (NYSE: BRK/A) had been an aggressive railroad buyer in recent filings although it appears that he had lightened up on these in the recent notes as well. If he is still interested in buying railroad stocks they just got cheaper.

UNP shares are down over 5% at $121.98, down from a $129.43 close on Tuesday, and it has a 52-week trading range of $89.58 to $137.56.  As Union Pacific is the largest of the rails and a harbinger for transportation, you can see this impacting key rail stocks:

• Burlington Northern Santa Fe C (NYSE: BNI) shares are down almost 2.5% at $81.70 with 52-week trading range $71.51 to $95.47.
• Canadian National Railway Comp (NYSE: CNI) shares are down 1.4% at $47.65 with a 52-week trading range $41.57 to $58.49.
• Norfolk Southern Corp. (NYSE: NSC) shares are down almost 3% at $48.55 with a 52-week trading range $45.38 to $59.77.
• CSX Corp. (NYSE: CSX) shares are down almost 2% at $42.85 with a 52-week trading range $33.50 to $51.88.

It’s pretty hard to imagine that trucking stocks will have that great of an open.  They hog diesel fuel and gasoline too.

Jon C. Ogg
December 19, 2007