Only 2 Days Left To Nucor Corporation (NYSE:NUE)’s Ex-Dividend Date, Is It Worth Buying?

Shares of Nucor Corporation (NYSE:NUE) will begin trading ex-dividend in 2 days. To qualify for the dividend check of US$0.38 per share, investors must have owned the shares prior to 28 June 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Nucor’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Nucor

Here’s how I find good dividend stocks

When researching a dividend stock, I always follow the following screening criteria:

• Is its annual yield among the top 25% of dividend-paying companies?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has it increased its dividend per share amount over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

NYSE:NUE Historical Dividend Yield June 25th 18

How well does Nucor fit our criteria?

The current trailing twelve-month payout ratio for the stock is 36.94%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect NUE’s payout to fall to 26.37% of its earnings, which leads to a dividend yield of around 2.30%. However, EPS should increase to $6.32, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from Nucor fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.

In terms of its peers, Nucor produces a yield of 2.30%, which is on the low-side for Metals and Mining stocks.

Next Steps:

If you are building an income portfolio, then Nucor is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three fundamental aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for NUE’s future growth? Take a look at our free research report of analyst consensus for NUE’s outlook.

2. Valuation: What is NUE worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether NUE is currently mispriced by the market.

3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.