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Yahoo
2 days ago
- Business
- Yahoo
Better Dividend Stock: Nucor vs. Steel Dynamics
Nucor and Steel Dynamics are two of the largest steelmakers in North America. Both companies have strong dividend histories. Nucor is likely to be attractive to more conservative investors, while Steel Dynamics will interest dividend growth investors. 10 stocks we like better than Nucor › Nucor (NYSE: NUE) and Steel Dynamics (NASDAQ: STLD) have a lot of similarities, which makes sense, since Nucor alumni founded Steel Dynamics. That said, these two U.S. steelmakers are not interchangeable investments. Dividend investors considering stepping into the cyclical steel industry while it is dealing with some industry softness will want to carefully consider what Nucor and Steel Dynamics offer before buying either one. Here's a quick primer. From a big-picture perspective, Nucor and Steel Dynamics make steel. But the real story is how they make that steel, which is by using electric arc mini-mills. This technology uses electricity and scrap steel to make "new" steel. It is more flexible than older blast furnace technology, which uses iron ore and metallurgical coal to make primary steel. While blast furnaces can be highly profitable during industry upturns, their high operating costs mean they can bleed red ink during downturns. Electric arc mini-mills tend to have more consistent and reliable profit margins through the cycle. In other words, Nucor and Steel Dynamics have strong core operations. On top of this strong foundation, Nucor and Steel Dynamics have both built businesses selling fabricated steel products. They basically take the commodity steel they produce and turn it into higher-margin items with more reliable demand characteristics through the steel cycle. This makes them even more robust to the normal cyclical industry downturns that happen. When you hear the word cyclical, you should worry about dividend consistency. However, the strong fundamentals of Nucor and Steel Dynamics on the business side have proven highly valuable to dividend investors. Nucor is a Dividend King, with over 50 consecutive years of annual dividend increases behind it. Steel Dynamics, a much younger company, has increased its dividend annually for 14 straight years. So, despite operating in a volatile industry, they are reliable dividend stocks. That said, there is an important difference between the two on the dividend front. Nucor is a large company that moves slowly and deliberately. That includes on dividends. Over the past decade, its dividend has grown at around 4% a year on an annualized basis. That is faster than the historical growth rate of inflation, so the buying power of the dividend is increasing over time. However, this is a tortoise, not a rabbit. Steel Dynamics' dividend has grown at more than 10% a year. Compared to Nucor it is, indeed, a rabbit. That has a lot to do with Steel Dynamics' smaller size, since it is easier to grow a business when it is small than when it is large and mature. But Steel Dynamics is also a bit more aggressive, noting that it has just entered the aluminum market. Its aluminum business uses similar technology to its steel business, so this isn't a huge reach. But it shows clearly that Steel Dynamics is a far more aggressive business. Nucor and Steel Dynamics have similarly attractive steel businesses. So the core business isn't likely to be the differentiating factor for investors. And they both have solid dividend histories behind them, though being a Dividend King clearly gives Nucor some bragging rights. Nucor's yield is around 1.8% today, which is higher than Steel Dynamics' 1.5%, with both being higher than the S&P 500's smaller average of 1.3%. The real difference here, however, is likely to boil down to the dividend growth rate, combined with the aggressiveness of management. If you are a conservative income investor who likes to buy reliable dividend stocks when they are out of favor, Nucor is likely to be the better choice. Notably, Nucor's stock has fallen 40% from its 2024 highs, which is actually a pretty normal drawdown for the stock. Steel Dynamics, which has more attractive growth prospects for its business (because it is smaller and because it is working to expand into aluminum), is only down around 10% over the same span. But if you are looking for rapid dividend growth, Steel Dynamics may be worth a premium price. That said, either choice will leave you owning a well-run U.S. steelmaker. Before you buy stock in Nucor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nucor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Better Dividend Stock: Nucor vs. Steel Dynamics was originally published by The Motley Fool
USA Today
3 days ago
- Business
- USA Today
Steel stocks: Is Nucor or Steel Dynamics the better buy under Trump's tariff moves?
Steel stocks: Is Nucor or Steel Dynamics the better buy under Trump's tariff moves? Show Caption Hide Caption Reaction from around the world as steel tariffs double "Strongly regret," and "unfair" were some of the reactions from trade partners around the world as the U.S. doubles tariffs on steel imports. Nucor (NYSE: NUE) and Steel Dynamics (NASDAQ: STLD) have a lot of similarities, which makes sense, since Nucor alumni founded Steel Dynamics. That said, these two U.S. steelmakers are not interchangeable investments. Dividend investors considering stepping into the cyclical steel industry while it is dealing with some industry softness will want to carefully consider what Nucor and Steel Dynamics offer before buying either one. Here's a quick primer. What do Nucor and Steel Dynamics do? From a big-picture perspective, Nucor and Steel Dynamics make steel. But the real story is how they make that steel, which is by using electric arc mini-mills. This technology uses electricity and scrap steel to make "new" steel. It is more flexible than older blast furnace technology, which uses iron ore and metallurgical coal to make primary steel. While blast furnaces can be highly profitable during industry upturns, their high operating costs mean they can bleed red ink during downturns. Electric arc mini-mills tend to have more consistent and reliable profit margins through the cycle. In other words, Nucor and Steel Dynamics have strong core operations. On top of this strong foundation, Nucor and Steel Dynamics have both built businesses selling fabricated steel products. They basically take the commodity steel they produce and turn it into higher-margin items with more reliable demand characteristics through the steel cycle. This makes them even more robust to the normal cyclical industry downturns that happen. Nucor and Steel Dynamics are reliable dividend stocks When you hear the word cyclical, you should worry about dividend consistency. However, the strong fundamentals of Nucor and Steel Dynamics on the business side have proven highly valuable to dividend investors. Nucor is a Dividend King, with over 50 consecutive years of annual dividend increases behind it. Steel Dynamics, a much younger company, has increased its dividend annually for 14 straight years. So, despite operating in a volatile industry, they are reliable dividend stocks. That said, there is an important difference between the two on the dividend front. Nucor is a large company that moves slowly and deliberately. That includes on dividends. Over the past decade, its dividend has grown at around 4% a year on an annualized basis. That is faster than the historical growth rate of inflation, so the buying power of the dividend is increasing over time. However, this is a tortoise, not a rabbit. Steel Dynamics' dividend has grown at more than 10% a year. Compared to Nucor it is, indeed, a rabbit. That has a lot to do with Steel Dynamics' smaller size, since it is easier to grow a business when it is small than when it is large and mature. But Steel Dynamics is also a bit more aggressive, noting that it has just entered the aluminum market. Its aluminum business uses similar technology to its steel business, so this isn't a huge reach. But it shows clearly that Steel Dynamics is a far more aggressive business. Which steel mill is right for you? Nucor and Steel Dynamics have similarly attractive steel businesses. So the core business isn't likely to be the differentiating factor for investors. And they both have solid dividend histories behind them, though being a Dividend King clearly gives Nucor some bragging rights. Nucor's yield is around 1.8% today, which is higher than Steel Dynamics' 1.5%, with both being higher than the S&P 500's smaller average of 1.3%. The real difference here, however, is likely to boil down to the dividend growth rate, combined with the aggressiveness of management. If you are a conservative income investor who likes to buy reliable dividend stocks when they are out of favor, Nucor is likely to be the better choice. Notably, Nucor's stock has fallen 40% from its 2024 highs, which is actually a pretty normal drawdown for the stock. Steel Dynamics, which has more attractive growth prospects for its business (because it is smaller and because it is working to expand into aluminum), is only down around 10% over the same span. But if you are looking for rapid dividend growth, Steel Dynamics may be worth a premium price. That said, either choice will leave you owning a well-run U.S. steelmaker. Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Nucor right now? Offer from the Motley Fool: Before you buy stock in Nucor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nucor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $656,825!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $865,550!* Now, it's worth notingStock Advisor's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor. See the 10 stocks »
Yahoo
19-05-2025
- Business
- Yahoo
The American Dream in Action: 2 U.S.-Based Businesses to Watch
Now could be a great time to buy this pair of leaders in the U.S. steel industry. Nucor has become one of the most important companies in this area. Steel Dynamics is taking on and surpassing established leaders. 10 stocks we like better than Nucor › The American dream includes a great many things, and Nucor (NYSE: NUE) and Steel Dynamics (NASDAQ: STLD) offer two different versions of achieving that dream. Both operate in the North American steel industry, with virtually all of their operations in the United States. Here's how Nucor and Steel Dynamics have achieved the American dream, and why they could both be worth buying right now. Before Nucor was a steel company, it was a bankrupt provider to the nuclear power industry. This was more than 50 years ago now, so that history is often forgotten on Wall Street. But it is foundational to Nucor's identity. At that time, the company started using electric arc mini-mills within its business, and the technology was so good that Nucor was able to emerge from bankruptcy with a new business focus. Today, it is one of the largest and most diversified steelmakers in North America. Electric arc mini-mills tend to be more flexible than the blast furnaces that dominated the steel industry decades ago. To simplify things, mini-mills can be ramped up and down more easily with demand fluctuations, allowing for a more profitable business through the cycle. This is important because steel is a highly cyclical industry, given steel's importance to economic activity. That said, Nucor has also focused on moving up the value chain, by increasingly making steel products (like building components) from the bulk steel it makes. That has improved margins and helped to soften the impact of cyclical downturns. The brush with bankruptcy, meanwhile, has left Nucor with a conservative ethos. It tends to focus on having a strong balance sheet, for starters. But it also has a habit of investing during industry downturns so it can come out the other side a stronger company. That kind of investment is what is happening right now, even as soft steel demand and prices have caused the stock to fall dramatically from its recent peaks. For long-term investors, however, this is exactly when buying makes the most sense, since the cyclical industry is highly likely to recover again, just like it has many times before. Steel Dynamics is a relatively young steel company that also makes use of electric arc mini-mills. That makes complete sense, however, because it was founded by former employees of Nucor. Management has basically taken every aspect of Nucor's business model and applied it to Steel Dynamics' business. That said, it is a faster-growing company because it is a smaller company, which may be of more interest to some investors. Steel Dynamics has taken a slightly different path, though. While Nucor has focused exclusively on steel and steel products, Steel Dynamics is venturing into the aluminum sector. The technology being used is similar, so this isn't a huge stretch. And it offers another avenue for growth, as the company builds out a second business line. Steel Dynamics' stock hasn't fallen as far as that of Nucor, so it probably isn't as big a bargain today. However, given the growth opportunity ahead of it in steel and in aluminum, it makes sense that investors are a little more upbeat about Steel Dynamics' future. Nucor and Steel Dynamics are two of the best-run steel mills in North America. But steelmakers aren't immune from global issues, as foreign countries often sell steel into the U.S. market at low prices. The U.S. steel industry contends that those low prices amount to dumping, which hurts companies like Nucor and Steel Dynamics. However, tariffs are often put in place to protect these steelmakers from such actions. All in, the tariff upheaval in the world could actually end up being a net benefit for Nucor and Steel Dynamics. And given the stock price pullbacks that both have experienced, particularly Nucor, both of these steel industry leaders are cheaper than they have been. If you want to buy American, Nucor and Steel Dynamics are two U.S.-based businesses you should definitely be watching today. Before you buy stock in Nucor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nucor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The American Dream in Action: 2 U.S.-Based Businesses to Watch was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
15-03-2025
- Business
- Yahoo
Steel Dynamics' (NASDAQ:STLD) Dividend Will Be Increased To $0.50
The board of Steel Dynamics, Inc. (NASDAQ:STLD) has announced that the dividend on 11th of April will be increased to $0.50, which will be 8.7% higher than last year's payment of $0.46 which covered the same period. Despite this raise, the dividend yield of 1.4% is only a modest boost to shareholder returns. View our latest analysis for Steel Dynamics While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Based on the last payment, Steel Dynamics was earning enough to cover the dividend, but free cash flows weren't positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward. Over the next year, EPS is forecast to expand by 37.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 15% by next year, which is in a pretty sustainable range. The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from $0.46 total annually to $1.84. This means that it has been growing its distributions at 15% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period. Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Steel Dynamics has seen EPS rising for the last five years, at 27% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend. In summary, while it's always good to see the dividend being raised, we don't think Steel Dynamics' payments are rock solid. While Steel Dynamics is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income stock. It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for Steel Dynamics that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
