Summary We believe Union Pacific represents an excellent dividend investment at these levels. In particular, the dividends have grown at a rapid rate recently, yet they continue to represent a relatively small percentage of free cash flow. We believe the fears about the Panama Canal expansion are overdone and believe that Union Pacific's response to positive train control has not been as terrible as some others. Dividends are obviously critically important to investor returns. As Clarke and Statman famously pointed out, had dividends been reinvested in the Dow from its inception in 1896 to 1998, it would have been worth somewhere in the neighborhood of 652,000. Dividends obviously matter. A lot. It's with that in mind we want to talk about our favourite freight rail dividend stock, Union Pacific (NYSE:UNP). We believe Union Pacific is the best in class amongst the class I railroads for a variety of reasons, but in this article we want to focus on the value and the sustainability of the dividend relative to its peers in the North American freight rail space. More