Dividend Aristocrat Overview: Nucor Corporation

About Nucor Corporation

Nucor Corporation, producer of steel used by bridges like these, has increased dividends since 1973. Photo courtesy smlp.co.uk/flickr.com.

Nucor Corporation, producer of steel products used by bridges like these, has increased dividends since 1973.
Photo courtesy smlp.co.uk/flickr.com.

Nucor Corporation is the #1 producer of steel and steel products in the United States and North America’s largest recycler.  The company’s products include carbon and steel alloy, steel piling, steel joists, joist girders and decks, steel fasteners, and wire and wire mesh.  Nucor also brokers, supplies and recycles ferrous and nonferrous metals through its wholly owned subsidiary The David J. Joseph Company.  Other subsidiaries include Harris Steel and Skyline Steel.  Nucor employs over 22,000 people in 200 operating facilities, and earned $585 million on $19 billion in sales in 2013.

The history of the Nucor Corporation goes back to 1905 when Ransom E. Olds left Oldsmobile and formed REO Motor Company.  In 1955, REO Motors merged with Nuclear Consultants, Inc. to form the Nuclear Corporation of America.  In 1962, the growing conglomerate entered the world of steel by acquiring steel manufacturer Vulcraft.  The company changed its name to Nucor in 1971 to showcase the divestiture of the non-steel portions of the conglomerate and new focus on steelmaking.  The company was listed on the NYSE in 1972 and began paying and increasing dividends in 1973.  In the 21st century, Nucor began acquiring other steel companies, among them Auburn Steel in 2001, Trico Steel and Birmingham Steel in 2002, Fort Howard Steel and Marion Steel in 2005.  Nucor purchased Harris Steel for $1.07 billion in 2006 and entered the scrap steel market with the purchase of The David J. Joseph Company in 2008.  These two companies and Skyline Steel, purchased in 2012, operate as wholly owned subsidiaries.

The company is a member of the S&P 500 index and a Fortune 500 company, and trades under the ticker symbol NUE.

Nucor Corporation’s Dividend and Stock Split History

Nucor Corporation has increase dividends annually since 1973.  Nucor met the Dividend Aristocrat criteria of 25 consecutive years of increasing regular dividend payments in 1998.  Since 2006, Nucor has increased its dividend payout in the 4th quarter of the calendar year and most recently in December 2013 increased the stock’s quarterly dividend by less than a cent.  Nucor is expected to announce the next dividend increase in December 2014.

After compiling a record of double digit annual dividend increases, Nucor has severely slowed their stock’s compounded annual dividend growth rate (CADGR) since 2009.  Nucor’s 5-year CADGR is 0.97%, while its 10-year CADGR is 20.20%.  The company’s 20-year and 25-year CADGR are 19.08% and 17.28%, respectively.  Most of this difference between the near-term and long-term dividend growth rates comes from when Nucor aggressively increased its annual dividend between 23.5 cents in 2004 and $1.31 in 2008.

Nucor has split its stock nine times since the company initiated dividends in 1973.  There have been 7 for 5 splits in June 1977 and September 1978, 3 for 2 splits in June 1979 and June 1986, and 2 for 1 splits in September 1983, June 1992, September 1993, October 2004 and May 2006.  100 shares of Nucor stock purchased when the company became a Dividend Aristocrat in 1998 would now be 400 shares after splits that are projected to collect a total of $592 in dividends in 2014.

Direct Purchase and Dividend Reinvestment Plans

Nucor has both direct purchase and dividend reinvestment plans.  Investors interested in participating in either of these plans can find information at the American Stock Transfer & Trust Company’s Investment Plan site.  Existing investors can purchase between $10 and $1000 in stock per month.  New direct purchase plan participants must buy at least 1 share of stock.

The plans have sales fees of $10 per sell order plus 4 cents per share sold.  Nucor pays all purchase fees whether through direct purchase or dividend reinvestment.

Helpful Links

Nucor Corporation’s Investor Relations Website

Current quote and financial summary for Nucor Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for NUE

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.