To earn the title of “Dividend King,” a company must not only have an excellent business model but also demonstrate the ability to execute across economic cycles. U.S. steel giant Nucor (NUE) exemplifies this. Despite a roughly 40% decline in its stock price due to the cyclical downturn in the steel industry, this company—with its legendary dividend track record—is creating an ideal buying opportunity for long-term investors.
As a key supplier of foundational materials for the national economy, Nucor’s steel products are widely used in construction, manufacturing, infrastructure, automotive, and appliances. The company’s unique advantage lies in its flexible production model, allowing it to quickly adjust capacity while relying heavily on scrap steel as a raw material, maintaining strong profitability even amid industry fluctuations. Compared to competitors dependent on blast furnaces (requiring iron ore and metallurgical coal), Nucor operates at lower costs and can remain profitable without maintaining high utilization rates.
This Dividend King has fallen out of favor—markets are currently fixated on economic uncertainty and weak steel demand. Over the past year, Nucor’s stock has plunged ~40% (near its 52-week low), reflecting this pessimism. However, for cyclical stocks, the best buying opportunities often emerge when fear is at its peak.
Looking back at Nucor’s historical price movements, a 40% drop has typically signaled a strong entry point for long-term investors. While short-term declines may persist, the stock has consistently rebounded strongly after each downturn, a testament to its business resilience. Analysts note that while the current ~2% dividend yield may seem modest, for investors seeking well-managed, historically undervalued companies, Nucor’s pullback makes it highly attractive. If geopolitical or macroeconomic risks remain a concern, a gradual accumulation strategy may be prudent—starting a position now and adding on further weakness could optimize long-term returns.
