10 Best Dividend Aristocrats According to Wall Street Analysts

3. Nucor Corporation (NYSE:NUE)

Analyst Upside Potential as of August 7: 26.2%

Nucor Corporation (NYSE:NUE) is a North Carolina-based steel production company that also manufactures related products. The US steel industry is constantly changing due to various internal and external factors, presenting the company with opportunities to compete, adapt, and innovate. This is typical of the commodity-driven steel sector. Investors should focus on the long-term perspective, where Nucor Corporation (NYSE:NUE) has proven to be a significant success. The company has been actively evolving its portfolio and enhancing its capacity to supply the rapidly growing data center sector with the steel required for constructing new data centers. Since the start of the year,  the stock has fallen by nearly 17% but, according to analysts, the stock has the potential to increase in value by 26.2% based on current market projections.

In the second quarter of 2024, Nucor Corporation (NYSE:NUE) reported revenue of over $8 billion, which fell by 15% from the same period last year, but beat analysts’ estimates by $556.5 million. The company has indicated that investors should anticipate a further decline in earnings for the third quarter of 2024, as steel prices continue to drop. In simple terms, it appears that a downturn in the steel industry may be starting, worsened by an influx of imports.

That said, Nucor Corporation (NYSE:NUE) maintains a competitive advantage due to its robust dividend history. To understand this better, it’s important to examine the company’s cash position. At the end of the latest quarter, Nucor had more than $5.43 billion in cash. Its operating cash flow over the trailing twelve months was $5.93 billion, and levered free cash flow for the period totaled $2.42 billion. The strong cash flow generation presents a bright future for dividend payments. The company has never missed a dividend in over 205 consecutive quarters. Moreover, it has been rewarding shareholders with growing dividends for the past 51 years, which makes NUE one of the best dividend aristocrat stocks. In the first six months of the year, the company returned $1.7 billion to shareholders. It currently offers a quarterly dividend of $0.54 per share and has a dividend yield of 1.48%, as of August 7.

As per Insider Monkey’s database of Q1 2024, 39 hedge funds held investments in Nucor Corporation (NYSE:NUE), down slightly from 40 in the previous quarter. These stakes have a collective value of over $468.7 million. Among these hedge funds, Ken Griffin’s Citadel Investment Group was the company’s leading stakeholder in Q1.