The railroad with better profit margins than Google - Fortune
Buffett already had stakes in a few major railroads, but he wanted to own one outright. Like many of Buffett’s investments, BNSF has been wildly successful, more than doubling its earnings since 2009. But Buffett might have been even more successful had he stayed closer to home and bought the railroad with headquarters. A few blocks away from Berkshire in Buffett’s hometown of Omaha: Union Pacific, No. 123 on this year’s Fortune 500 list. Union Pacific and BNSF are far and away the dominant carriers in the Western U. S. , and stand nose to nose in revenues. But as Buffett himself noted in Berkshire’s most recent annual report, his railroad’s service slipped badly last year, and Union Pacific both performed a lot better for customers and made a lot more money. Indeed, the 153-year-old Union Pacific—often referred to as “UP” within the rail industry—is not only outpacing Buffett’s railroad but also beating almost every other industrial company in the Fortune 500. The old-economy warhorse generates... In 2014, Union Pacific logged $5. 18 billion in net profits on sales of $24 billion, for a return-on-revenues ratio of 21. 6%. By that measure, the railroad company ties Apple (21. 6%) The key to UP’s remarkable profitability is a highly. Source: fortune.com
