Nucor Corp (NYSE: NUE) Is a Discounted Dividend To Buy Hand-Over-Fist

It is believed that an industry downturn could be an ideal time to load up on stocks. The United States has seen production woes in the steel industry and reported a modest year-over-year decline of 1.5% in steel output as of March 2025. It is a cyclical industry, but also a very important aspect of the economy. The market is experiencing muted demand and pricing pressure, with some industries like automotive and construction feeling the impact.

While the US steel market is under pressure, it is an ideal time for investors to make their moves. Nucor Inc. (NYSE: NUE) is a company that produces steel and other products. It is also the largest steel producer in the country. Here’s why I think NUE stock is a dividend stock to buy hand over fist.

Nucor can survive a market downturn

Nucor uses a different method of making steel, and it uses electricity for the same. Its production is more flexible and can be altered, keeping the demand in mind. This ensures that the margins are maintained and the market ups and downs are handled well.

Not many think of Nucor when it comes to AI, but the company is investing in growing its business. It has committed $3 billion in capital investments this year, with several major projects expected to begin commercial shipments in 2025 and others coming online over the next few years. It is using AI and machine learning to improve the quality of the finished products and uses recycled materials instead of traditional raw materials.

It has integrated AI into the industrial steel process and managed to reduce costs and energy. This helped improve the margin and output. In 2024, the company acquired Southwest Data Products, Inc. for $115 million. It is a manufacturer of data center infrastructure. Nucor then announced the launch of Nucor Data Systems, which is a business unit to cater to the customers in the data center infrastructure industry.

The dip is a chance to buy

Nucor stock is exchanging hands for $117 and is down from $176. The stock is up 2.2% year-to-date but down about 18% in the past six months and approximately 25% over the past 12 months. This dip is an ideal time to make your move. People might be selling the stock, considering the downturn in the steel industry, but Nucor’s solid history and strong fundamentals reflect the company’s strength. It is an industry giant and an ideal choice for passive income investors. 

Despite the market slowdown, Nucor beat expectations in the first quarter and reported an impressive backlog of orders. It reported an EPS of $0.77 and its steel mill shipped 6,463,000 short tons, up 10% year-over-year. It reported net sales of $7.83 billion and net earnings of $156 million.

Nucor Corporation ended the quarter with $4.06 billion in cash and cash equivalents and declared a dividend of $0.55 per share. On the earnings call, the management mentioned that they had the highest backlog in the history of the company, and the steel product backlog is up 25% year over year.  

A true dividend king 

An industry giant, Nucor, has increased annual dividends for the past 52 years, and it has an annual dividend growth rate of 4% in a decade. It enjoys a dividend yield of 1.90%. The Dividend King has enough liquidity to keep rewarding shareholders. It boasts a very strong balance sheet with low debt. 

TipRanks has an average price target of $144.75, a 23% upside from the current level, and a moderate buy rating on the stock. 

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