ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Union Pacific's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 11.06%.
As of today (2026-07-02), Union Pacific's WACC % is 8.97%. Union Pacific's ROIC % is 11.39% (calculated using TTM income statement data).
Union Pacific generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Union Pacific (LTS:0R2E) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Union Pacific's WACC % is 8.97%. Union Pacific's ROIC % is 11.39% (calculated using TTM income statement data).
Union Pacific generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Union Pacific ROIC % Related Terms
Union Pacific ROIC % Historical Data
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The historical data trend for Union Pacific's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Railroads subindustry, Union Pacific's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Union Pacific ROIC % vs Transportation Industry
For the Transportation industry and Industrials sector, Union Pacific's ROIC % distribution charts can be found below:
* The bar in red indicates where Union Pacific's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Union Pacific (LTS:0R2E) has a ROIC % of 11.06% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Union Pacific and its competitors.
Is Union Pacific's ROIC % too high?
Union Pacific's current ROIC % is 11.06%. The Transportation industry median ROIC % is 4.69. Union Pacific's value of 11.06% is 135.8% above this industry median. Overall, Union Pacific has a GF Score™ of 88/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Union Pacific's ROIC % compare to CSX and NSC?
Union Pacific's ROIC % of 11.06% can be compared against companies in the Transportation industry. The industry median ROIC % is 4.69. Union Pacific's value of 11.06% is 135.8% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Transportation company?
The median ROIC % among Transportation companies is 4.69, based on 985 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Union Pacific's current ROIC % of 11.06% is 135.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Union Pacific and its competitors. For the Transportation industry, the median ROIC % is 4.69 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Union Pacific's current ROIC % is 11.06%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Union Pacific stock overvalued right now?
Based on GuruFocus' analysis, Union Pacific (LTS:0R2E) is currently considered Modestly Overvalued. The stock's GF Value™ is $246.39, compared to a current price of $277.85 — trading 12.8% above its estimated fair value. The current ROIC % is 11.06% and 135.8% above the Transportation industry median of 4.69. Union Pacific's overall GF Score™ is 88/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Union Pacific (LTS:0R2E), the current ROIC % is 11.06% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Union Pacific (LTS:0R2E) Overvalued in 2026?
Based on GuruFocus' analysis, Union Pacific stock appears to be overvalued.
The current stock price of $277.85 is trading 12.8% above its estimated GF Value™ of $246.39.
GuruFocus considers Union Pacific to be Modestly Overvalued.
Key valuation signals for LTS:0R2E:
ROIC %: 11.06%
GF Value™: $246.39 vs. price of $277.85 (12.8% above fair value)
Industry Position: 135.8% above the Transportation median
No single metric tells the full story. See the LTS:0R2E stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Omaha, Nebraska-based Union Pacific is the largest public railroad in North America. Operating on more than 30,000 miles of track in the western two-thirds of the US, Union Pacific generated $24.5 billion of revenue in 2025 by hauling coal, industrial products, intermodal containers, agricultural goods, chemicals, fertilizers, and automotive goods. Union Pacific owns about one-fourth of Mexican railroad Ferromex and historically derives roughly 10% of its revenue hauling freight to and from Mexico.
88GF Score
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