Nucor Hikes Quarterly Dividend - Analyst Blog

By Zacks Equity Research,

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Steel giant Nucor Corporation ( NUE ) announced a hike in its regular quarterly cash dividend to 37 cents per share from 36.75 cents. The increased dividend is payable on Feb 11, 2014, to stockholders of record as of Dec 31, 2013.

Nucor has a track record of raising dividends almost every year since it started paying dividends in 1973. This reflects the company's strong potential to generate a consistent stream of earnings in the long term.

In December last year, Nucor increased its regular quarterly cash dividend to 36.75 cents per share from 36.5 cents.

Nucor released its third-quarter 2013 results in Oct 2013. The company's adjusted (excluding special items) earnings of 49 cents per share surpassed the Zacks Consensus Estimate of 38 cents. The adjusted earnings exclude charges of $14 million or 3 cents a share associated with the collapse of a storage dome at a new plant in Louisiana.

Profit (as reported) for the quarter came in at $147.6 million (or 46 cents a share), up 34% from $110.3 million (or 35 cents) reported a year ago. The results were aided by improvement in demand across some end-markets and restocking of inventory by customers.  

Earnings for the quarter were affected by the storage dome collapse at Nucor Steel Louisiana in St. James Parish on Sep 25 which led to a partial write down of inventory and fixed asset balances related to it. The collapse also delayed the opening of the new direct reduced iron (DRI) plant being constructed at the site. However, the event did not result in any injuries or environmental damage.

Nucor expects the fourth quarter to show moderately lower earnings given the narrowed shipping volumes due to seasonal factors.  In addition, planned outages are expected at the SBQ mill in Norfolk, Neb., the sheet mill in Berkeley County, S.C., and the structural mill in Blytheville, Ark., in connection with previously declared capital expansion projects at these facilities. However, metal margins are expected to remain stable.

Nucor currently carries a Zacks Rank #3 (Hold).

Other companies in the steel and related industries with favorable Zacks Rank are Companhia Siderurgica Nacional ( SID ), Dynamic Materials Corp. ( BOOM ) and United States Steel Corp. ( X ).  While Companhia Siderurgica and Dynamic Materials hold a Zacks Rank #1 (Strong Buy), United States Steel has a Zacks Rank #2 (Buy).

DYNAMIC MATLS (BOOM): Free Stock Analysis Report

NUCOR CORP (NUE): Free Stock Analysis Report

CIA SIDERUR-ADR (SID): Free Stock Analysis Report

UTD STATES STL (X): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BOOM , DRI , NUE , SID , X

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