Up to date on July ninth, 2025 by Felix Martinez
The Dividend Kings are a choose group of shares which have elevated their dividends for a minimum of 50 consecutive years. We consider the Dividend Kings are among the many highest-quality dividend progress shares.
With this in thoughts, we created a full record of all of the Dividend Kings.
You’ll be able to obtain the complete record, together with essential monetary metrics reminiscent of dividend yields and price-to-earnings ratios, by clicking the hyperlink beneath:
A comparatively new member to affix this record is Nucor Company (NUE), a distinguished American metal producer. Nucor has efficiently navigated the trade’s cyclical nature, constantly rising its dividend.
This text will present an outline of the corporate’s enterprise, its progress prospects, aggressive benefits, and anticipated returns.
Enterprise Overview
Nucor is headquartered in Charlotte, North Carolina, and is a huge within the metal trade as the most important publicly traded US-based metal company primarily based on its market capitalization. The corporate at present operates in three segments: Metal Mills (the most important section by income), Metal Merchandise, and Uncooked Supplies.
The metal trade is notoriously cyclical, which makes Nucor’s streak of 52 consecutive years of dividend raises much more outstanding. The corporate faces challenges from worldwide rivals. Some international locations (together with China) subsidize their metal trade, making metal exported to america artificially low-cost.
Nucor manufactures all kinds of supplies, together with sheet metal, metal bars, structural varieties, metal plates, downstream merchandise, and uncooked supplies. Nearly all of the corporate’s manufacturing is derived from a mix of sheet and bar metal, a development that has been constant for a few years.
Nucor has been profitable over the long run because of its concentrate on low-cost manufacturing. This permits the corporate to keep up profitability throughout downturns and produce vital working leverage throughout higher instances.
Moreover, it has expanded its product choices to new markets whereas sustaining and rising its market management in present channels.
Nucor Company reported Q1 2025 internet earnings of $156 million ($0.67 per diluted share), down from $845 million ($3.46 per diluted share) in Q1 2024. Adjusted internet earnings had been $179 million ($0.77 per diluted share), excluding $29 million ($0.10 per share) in one-time costs for facility closures. Web gross sales fell 4% to $7.83 billion from $8.14 billion, with a 12% drop in common gross sales value per ton, offset by a ten% rise in shipments to six.83 million tons. EBITDA was $696 million, and internet earnings earlier than noncontrolling pursuits had been $226 million.
Section efficiency confirmed Metal Mills earnings at $231 million (down from $1.1 billion), Metal Merchandise at $288 million (down from $512 million), and Uncooked Supplies at $29 million (up from $9 million). Company/eliminations reported a $263 million loss. Working charges at metal mills had been 80%, up from 74% in This autumn 2024. Scrap prices per ton fell 6% to $394. Pre-operating and start-up prices rose to $170 million ($0.56 per share). Working money movement was $364 million, with capital expenditures totaling $859 million. Nucor repurchased 2.3 million shares for $306 million and paid $129 million in dividends.
Nucor expects Q2 2025 earnings to extend, pushed by larger metal mill costs, elevated metal product volumes, and improved uncooked supplies margins. CEO Leon Topalian emphasised strong demand, a powerful steadiness sheet, and a various portfolio, positioning Nucor to navigate market volatility and ship long-term worth. The corporate maintained $4.06 billion in money and short-term investments and elevated its credit score facility to $2.25 billion, retaining top-tier credit score rankings.
Supply: Investor Presentation
Progress Prospects
We consider that Nucor’s earnings per share are prone to improve by ~20% per 12 months on common over the subsequent 5 years. Nucor’s earnings per share are extremely delicate to metal costs. The corporate’s earlier all-time earnings-per-share excessive got here in 2008, which coincided with the all-time excessive value of metal within the US.
The elements that drove the large earnings of 2021 and 2022, which embody pent-up demand after the pandemic and blowout metal costs amid provide chain disruptions, are unsustainable.
For the long run, Nucor’s markets have a largely favorable progress outlook. Nucor’s diversification throughout finish markets additionally gives some relative stability throughout downturns. This helps the corporate carry out effectively in comparison with different metal makers throughout recessions.
Nucor can be investing in progress initiatives that embody harvesting new income synergies, bettering operational and provide chain efficiencies, and increasing the enterprise’s product choices and geographic footprint.
Supply: Investor Presentation
Aggressive Benefits & Recession Efficiency
Nucor is a producer and distributor of metal, which, just like the overwhelming majority of uncooked supplies companies, is essentially a commodity product and due to this fact topic nearly completely to cost as its sole differentiator.
Warren Buffett has the next to say about commodity companies:
“Shares of firms promoting commodity-like merchandise ought to include a warning label: ‘Competitors could show hazardous to human wealth.’” – Warren Buffett
Actually, commodity companies aren’t probably the most defensive companies attributable to their cyclicality. This may be seen by Nucor’s efficiency through the 2007-2009 monetary disaster:
2007 adjusted earnings-per-share: $4.98
2008 adjusted earnings-per-share: $6.01
2009 adjusted earnings-per-share: internet lack of ($0.94)
2010 adjusted earnings-per-share: $0.42
2011 adjusted earnings-per-share: $2.45
As a commodity producer, Nucor is very susceptible to fluctuations within the value of metal. Metal demand is tied to development and the general financial system. Through the Nice Recession, the corporate’s earnings per share declined from $6.01 in 2008 to a loss per share of -$0.94 in 2009, and the inventory misplaced two-thirds of its market capitalization in simply six months.
Traders ought to pay attention to the numerous draw back danger related to Nucor, because the metal producer is prone to carry out poorly in a chronic recession.
Valuation & Anticipated Whole Returns
We assume a normalized earnings energy per share of $6.75 for 2025 to clean out the cyclicality of the outcomes. That places the price-to-earnings energy ratio at 20.6, which is larger than our truthful worth estimate of 12.0. For metal producers, we stay extra cautious than the final market, in no small half as a result of volatility of commodity costs.
Because of our modeling assumptions, Nucor is barely overvalued at this time. A compressing valuation a number of might lower annual returns by 9% over the subsequent 5 years.
Moreover, the inventory boasts a present dividend yield of 1.6%. Lastly, we anticipate Nucor’s earnings per share to extend by about 20% per 12 months. Because of this, complete returns are anticipated to be solely 12.6% per 12 months on common over the subsequent 5 years. On account of its low anticipated return, the inventory has a maintain score round its present value.
Closing Ideas
Nucor’s standing as a Dividend King helps it stand out among the many extremely risky supplies sector. There are only a few uncooked supplies companies which have multi-decade monitor information of compounding their dividends and adjusted earnings per share.
Nucor has a low dividend yield when in comparison with the broader inventory market, however the firm has a protracted historical past of annual dividend raises. Nucor additionally has a powerful trade place and a wholesome steadiness sheet.
Nevertheless, the inventory doesn’t benefit a purchase advice on the present value, given its truthful anticipated returns. For buyers searching for publicity to uncooked supplies, we advocate ready for a extra favorable alternative to accumulate Nucor shares.
Further Studying
The next databases of shares include shares with very lengthy dividend or company histories, ripe for choice for dividend progress buyers.
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