Union Pacific (NYSE: UNP), the largest U.S. railroad operator, said it will increase its quarterly by 22% to 33 cents a share and raise its 2010 capital spending plan by $100 million to $2.6 billion due to increased shipping volumes.

The new dividend is payable on July 1st to shareholders of record on May 28th.

Nebraska-based Union Pacific lasted raised its dividend in 2008, but with news of the latest dividend increase, the company's payout has more than tripled since 2002.

A dividend hike and increased capital spending plans are positive signs from a company that is as economically sensitive as Union Pacific is.

Transportation firms provide investors with good insight regarding the overall health of the economy and the fact that UP is seeing more robust shipping volumes is good news.

The company also said it may bring back some of the 2,800 workers it furloughed last year. On top of the dividend increase, Union Pacific is rewarding shareholders another way with plans to extend a share repurchase plan that expires in March 2011.

The company did not specify the amount of that buyback, but the current plan allows for the repurchase of 32.6 million shares.