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Nucor (NUE) Declares Hike in Cash Dividend to 38 Cents

Zacks Equity Research
Updated

Nucor Corporation NUE declared that its board has increased the regular quarterly cash dividend on Nucor's common stock to 38 cents. The revised dividend reflects a roughly 0.7% increase from the prior payout of 37.75 cents per share.

This cash dividend is payable on Feb 9, 2018, to stockholders on record as of Dec 29, 2017. This also marks Nucor's 179th consecutive quarterly cash dividend. The company has hiked dividend for 45 straight years since 1973 and has returned more than $5 billion in capital to stockholders in the form of dividends, share repurchases and supplemental dividends.
 
Nucor’s shares have moved up 4.6% in the past three months, outperforming the industry’s 3.3% gain.

 


 

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Nucor, in October, said that it expects generally stable and improving market conditions for automotive, energy, nonresidential construction, agriculture and heavy equipment. It is also encouraged by the cumulative benefits resulting from successful trade cases of the domestic steel industry.

Nucor has been focusing on growth through strategic acquisitions over the past several years. The purchase of Gallatin Steel has strengthened its foothold in the key Midwest market and allowed it to better serve its flat-rolled customers in the growing pipe and tube segment. The buyout of Independence Tube Corporation has also reinforced the company's foothold in the key non-residential construction end-use market. Moreover, the buyout of Southland Tube strengthened Nucor’s foothold in the hollow structural section (HSS) steel tubing market.

The company is seeing continued momentum in the automotive market. It remains focused on achieving greater penetration of this major market. Nucor has entered into a joint venture with JFE Steel Corporation of Japan to build and operate a plant in Mexico that will supply sheet steel to the country’s growing automotive market.

Nucor also remains committed to boost its production capacity. The company, last month, said that it will build a full-range merchant bar quality (MBQ) mill at its bar steel mill located in Bourbonnais, IL. The MBQ mill, which is likely to cost $180 million, will have an annual capacity of 500,000 tons. The project is expected to be completed in two years.

However, Nucor expects fourth-quarter 2017 earnings to be similar to slightly decreased from the third quarter. It also sees some declines in the steel mills segment mainly due to seasonality factors and weakness in plate steel. In third-quarter 2017, steel mills unit witnessed decreased profitability on a sequential-comparison basis while performance of plate mills decreased considerably.

 

Nucor Corporation Price and Consensus

 

Nucor Corporation Price and Consensus | Nucor Corporation Quote

 

Zacks Rank & Stocks to Consider

Nucor currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Westlake Chemical Corporation WLK, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 76% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 195.1% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 131.7% year to date.

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