This example comparing selected financial information of two companies in the same industry illustrates the purchase and sale approach of Bristol Gate.
Union Pacific was purchased at the US Equity Fund’s inception and is still held today. The dividend growth of Union Pacific has been and remains exceptional. Outstanding operating performance has allowed for substantial cash returns to shareholders while maintaining a very strong balance sheet.
CSX was purchased in December 2011 and was sold in December 2013. Our approach identified a strong year of dividend growth at CSX and anticipated the slowing of this growth. It appears as if CSX has slowed cash returns to shareholders as it works to improve its balance sheet.
| Union Pacific | 2010 | 2011 | 2012 | 2013 | 2014 |
| Revenues $mm | 11,956 | 19,557 | 10,926 | 21,963 | 17,835 |
| Operating Ratio | 70.6 | 70.7 | 67.8 | 66.1 | 64.2 |
| Free Cash Flow * $mm | 1,021 | 1,861 | 1,277 | 1,994 | 946 |
| Divdend Growth % | 21.3 | 47.3 | 29 | 18.8 | 29 |
| Share Repurchse $mm | 1,250 | 1,418 | 1,475 | 2,200 | 2,312 |
| Average Debt to equity % | 53.9 | 48.7 | 45.5 | 43.0 | 46.6 |
* FCF after common share dividends
| CSX | 2010 | 2011 | 2012 | 2013 | 2014 |
| Revenues $mm | 10,636 | 11,743 | 11,756 | 12,026 | 9,477 |
| Operating Ratio | 71.1 | 70.9 | 70.6 | 71.1 | 69.7 |
| Free Cash Flow * $mm | 1,049 | 714 | 47 | 367 | 275 |
| Divdend Growth % | 11.4 | 36.4 | 20 | 9.3 | 6.8 |
| Share Repurchse $mm | 1,400 | 1,550 | 720 | 350 | 388 |
| Average Debt to equity % | 92.1 | 97.8 | 101.8 | 92 | 85 |
