Updated on February 5th, 2025 by Felix Martinez
Nucor Corporation (NUE) is the largest steel producer in North America. Despite operating in the notoriously volatile raw materials sector, Nucor is also a remarkably consistent dividend growth stock. The company is in the S&P 500 Index and has increased its annual dividend for over 52 consecutive years, which qualifies it to be a member of the Dividend Aristocrats list.
The Dividend Aristocrats have long histories of raising their dividends each year, even during recessions, which makes them relatively rare finds within the broader S&P 500. With this in mind, we created a list of all 69 Dividend Aristocrats, along with important financial metrics like price-to-earnings ratios and dividend yields.
You can download an Excel spreadsheet with the full list of Dividend Aristocrats by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
Nucor’s dividend consistency allows it to stand out in its industry. Steel is a particularly difficult industry due to the cyclical nature of the business model, which makes Nucor’s streak of annual dividend increases even more impressive.
This article will analyze Nucor’s business model, growth prospects, and valuation to determine whether the stock is a buy right now.
Business Overview
Nucor is the largest steel producer in North America after decades of growth. The company is headquartered in Charlotte, North Carolina, and has a market capitalization of $30.7 billion.
Nucor was not always a leader in the steel manufacturing industry. The company has a long and convoluted corporate history that can be traced back to the company’s founder, Ransom E. Olds (the creator of the Oldsmobile automobile). Olds left his own automotive company over a disagreement with shareholders to form the REO Motor Company, which eventually transformed into the Nuclear Corporation of America – Nucor’s first predecessor.
The company currently operates in three segments: Steel Mills (the largest segment by revenue), Steel Products, and Raw Materials.
Source: Investor presentation
Nucor manufactures a wide variety of material types, including sheet steel, steel bars, structural formations, steel plates, downstream products, and raw materials. The majority of the company’s production comes from a combination of sheet and bar steel, as has been the case for many years.
Nucor has been successful over the long-term because of a focus on low-cost production. This allows it to maintain profitability during downturns, as well as to produce significant operating leverage during better times. In addition, it has worked to expand its product offerings to new markets, and maintain and grow its market leadership in existing channels.
Growth Prospects
The past several years have been volatile for Nucor and its competitors around the globe. Steel prices have been fluctuating wildly, driven primarily by a supply glut coming out of international markets, specifically China. However, the industry outlook has been quite favorable lately.
Nucor Corporation disclosed its Q4 2024 earnings on January 27th, 2025, demonstrating resilience amid challenging market conditions. The company reported earnings of $287 million, or $1.22 per diluted share, reflecting an increase from the third quarter’s $250 million, or $1.05 per share. However, adjusted net earnings for the third quarter, excluding non-cash impairment charges, stood at $353 million, or $1.49 per share. The company’s total revenue for the fourth quarter reached $7.08 billion, marking a 5% decline from the previous quarter and an 8% drop compared to the same period in 2023. Annual revenue for 2024 totaled $30.73 billion, an 11% decrease from 2023. Lower steel prices and reduced shipment volumes contributed to these declines.
Despite challenging market conditions, Nucor maintained strong financial stability, with $4.14 billion in cash and short-term investments by year-end. The company’s steel mill operating rate for 2024 stood at 76%, slightly down from 78% in 2023. Capital expenditures on growth projects led to pre-tax costs of $594 million for the year, increasing from $400 million in 2023. Nucor continued its commitment to shareholder returns, repurchasing 13.1 million shares in 2024 and issuing its 207th consecutive quarterly dividend. The company has increased its dividend for 52 consecutive years.
Looking ahead, Nucor expects steady earnings in its steel mills and steel products segments for the first quarter of 2025, while raw materials earnings are projected to decline. Management remains optimistic about improving market conditions, supported by steel-intensive economic trends. CEO Leon Topalian emphasized the company’s strong positioning as the largest and most diversified steel producer in the U.S., highlighting opportunities for growth despite recent industry headwinds.
Overall, we expect Nucor’s earnings-per-share to grow by more than 20% per year over the next five years, as the company is coming off an extremely low base for 2025.
Source: Investor presentation
Competitive Advantages & Recession Performance
Nucor is a manufacturer and distributor of raw materials and steel. Accordingly, the company is a ‘commodity business’ – one in which the single largest differentiator between competitors is price.
Warren Buffett has the following to say about commodity businesses:
“Stocks of companies selling commodity-like products should come with a warning label: ‘Competition may prove hazardous to human wealth.’” – Warren Buffett
Certainly, commodity businesses are not the most defensive businesses, thanks to their cyclicality. This can be seen by looking at Nucor’s performance during the 2007-2009 financial crisis:
- 2007 adjusted earnings-per-share: $4.98
- 2008 adjusted earnings-per-share: $6.01
- 2009 adjusted earnings-per-share: net loss of ($0.94)
- 2010 adjusted earnings-per-share: $0.42
- 2011 adjusted earnings-per-share: $2.45
The financial crisis decimated Nucor’s earnings-per-share. The company is one of few Dividend Aristocrats whose earnings turned negative during this tumultuous period. Earnings have only recently caught up to their pre-recession levels, although Nucor has steadily increased its dividend payments.
Valuation & Expected Returns
Nucor is expected to report adjusted earnings-per-share of about $6.75 in fiscal 2025. That puts the price-to-earnings ratio at ~19.5, which is above our fair value estimate of 12.0. We remain more cautious than the general market for steel producers, partly due to the volatility of commodity prices.
We see fair value at 12 times earnings, meaning Nucor is overvalued today. If the P/E multiple contracts from 19.5 to 12, it would reduce annual returns by more than -9% over the next five years.
The current yield is 1.7%, and we expect EPS to grow 20.6% each year over the next five years. We see total annual returns of ~11% in the next five years.
Nucor has a highly impressive dividend history. It has increased its dividend for 52 consecutive years. It has paid over 200 consecutive quarterly dividends. That said, the rate of dividend growth has lagged average over the last decade, with most annual increases in the low single-digits on a percentage basis.
Final Thoughts
Nucor’s status as a Dividend Aristocrat and its most recent dividend increase as a Dividend King help it stand out among the highly volatile materials sector. There are a handful of raw materials businesses that have multi-decade track records of compounding their adjusted earnings-per-share.
Nucor features a long history of annual dividend increases, a strong industry position, and a healthy balance sheet.
We now see the stock as attractively priced given projected earnings growth. Overall, the stock has a buy recommendation at the current price.
Additionally, the following Sure Dividend databases contain the most reliable dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.