Can NUE's Strong Balance Sheet Power Bigger Shareholder Returns Ahead?

Nucor Corporation NUE is maximizing its returns to shareholders by leveraging its strong balance sheet and cash flows. It returned $758 million to its shareholders through dividends and share repurchases in the first half of 2025 and around $985 million year to date. The company returned 55% of its net earnings to its shareholders in the second quarter. It also repurchased around 0.7 million shares in the third quarter and roughly 4.8 million shares so far this year.

NUE ended the second quarter of 2025 with strong liquidity of roughly $3.4 billion, including cash and cash equivalents and short-term investments of around $1.95 billion. Operating cash flow was roughly $1.1 billion in the first six months of 2025.

The company, in December 2024, raised its quarterly dividend to 55 cents per share from 54 cents. Nucor has increased its regular dividend for 52 straight years since it started paying dividends in 1973. It remains committed to returning at least 40% of annual net earnings to its shareholders. NUE offers a dividend yield of 1.5% at the current stock price. Its payout ratio is 36% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of 7.5%. 

Nucor is executing a well-defined capital allocation policy using its substantial cash generation to drive shareholder value, fund its growth projects and reduce debt. The company continues to prioritize returning capital to its shareholders in the second half of 2025. With a rock-solid balance sheet underpinned by a strong credit profile, NUE remains well-placed to continue this shareholder-focused strategy.

Among its peers, Steel Dynamics, Inc. STLD remains committed to maximizing shareholder returns. Steel Dynamics repurchased shares worth $450 million during the first half of 2025. Steel Dynamics also raised its quarterly dividend by 9% to 50 cents per share in February 2025. It ended second-quarter 2025 with strong liquidity of around $1.9 billion. 

Commercial Metals Company CMC is also pursuing a disciplined capital allocation strategy, capitalizing on its solid balance sheet and cash flow profile. Commercial Metals repurchased shares worth $50.4 million during the fiscal third quarter, and has bought back $203.6 million during the 12 months ending May 31, 2025. Commercial Metals has also raised its quarterly dividend by 50% since October 2021.

NUE’s Price Performance, Valuation & Estimates

Nucor has gained 22.3% year to date against the Zacks Steel Producers industry’s growth of 25.2%.

From a valuation standpoint, NUE is currently trading at a forward 12-month earnings multiple of 14.09, a roughly 28.3% premium to the industry average of 10.98X. It carries a Value Score of B.

The Zacks Consensus Estimate for NUE’s 2025 earnings implies a year-over-year decline of 8.9%. The EPS estimates for 2025 have been trending lower over the past 60 days.

NUE stock currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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