1 Magnificent Dividend King Stock Down 40% to Buy and Hold Forever

Core Insights - Nucor operates as a steel maker utilizing electric arc mini-mills, which are more flexible and environmentally friendly compared to traditional blast furnace methods, leading to higher margins throughout the steel cycle [1] - The company produces specialty products internally, such as industrial garage doors and data center racks, which have different demand cycles and higher margins, supporting long-term profitability [2] - Nucor's management views industry downturns as opportunities for growth, often increasing capital investments during these periods to strengthen the company for future recovery [7] Financial Performance - Nucor's stock has experienced significant pullbacks, including a current decline of approximately 40%, which is consistent with historical trends in the cyclical steel industry [3][8] - The company has a modest debt-to-equity ratio of around 0.33, indicating a solid balance sheet that provides financial flexibility during downturns [4] - Nucor's fourth quarter 2024 earnings guidance is projected to be between $0.55 and $0.65 per share, down from $3.16 a year ago, yet the company remains profitable, contrasting with peers like Cleveland-Cliffs, which is expected to incur losses [10] Dividend and Investment Opportunity - Nucor is recognized as a Dividend King, having increased its dividend for over 50 consecutive years, showcasing a strong business model despite operating in a cyclical industry [13] - The current pullback in stock price presents a potential buying opportunity for long-term investors, as historical sell-offs have often led to gains in the long run [14][15] - The company's dividend yield is around 1.8%, and its reliable dividend payments make it an attractive option for investors looking for stability in a volatile sector [15] Strategic Diversification - Nucor has focused on a broad product portfolio and geographic expansion, which helps mitigate the cyclical nature of the steel industry [16] - The company has also expanded its offerings in specialty steel products, further enhancing its profitability and resilience [16]