Nucor (NUE) is a leading steel company with a massive market share in North American structural, cold finish and bar steels, notes resources sector expert Clif Droke, editor of Cabot SX Gold & Metals Advisor.

Nucor has managed to maintain consistent profit growth for many years, even in periods when other steelmakers have struggled. A key to Nucor’s success has been in its steady intensive capital investments, allowing it to achieve increasing efficiencies (the latest being a $290 million modernization of its Indiana sheet mill).

The firm’s investments paid off handsomely in 2021, which was a record-setting year for the firm. Nucor posted full-year sales of $36 billion, up 81% from the prior year, based on higher tons sold and higher selling prices (up 64% from 2020).

Fourth-quarter revenue was $10.3 billion (its fourth consecutive quarterly record), up a mouth-watering 97%, while per-share earnings of $7.97 beat estimates 13 cents. Nucor also operated its mills at 94% of capacity for the year, versus 82% in 2020, a testament to the strong demand for its steel.

Management said it was “overwhelmingly positive” for 2022 based on pent-up demand, predicting the end use market would remain strong for steel and steel products and expecting another year of “strong profitability.”

Shareholder returns remain another focus going forward (returns averaged 55% of net income last year), and Nucor just hiked its quarterly dividend by a healthy 24% (1.3% yield) with plans to repurchase additional shares in 2022.

For Q1, analysts see sales and per-share earnings jumping 50% and 132%, respectively. Participants can buy a conservative position in NUE using a level slightly under $134 as the initial stop-loss on a closing basis.

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