Is There Any Reason To Invest In Nucor Stock?
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Nucor (NUE) stock returned 85.4% over the past twelve months, compared with 12.8% for the S&P 500. The steelmaker has also kept repurchasing its own shares. Over three years, Nucor reduced its diluted share count from 249 million to 227 million, leaving each remaining share with a larger claim on the business and its earnings. What has that larger slice been worth to a shareholder?
Nucor’s Earnings Per Share Fell Slower Than Net Income
The larger slice has softened a fall in profit rather than added to growth. Over the three years to October 3, 2026, Nucor’s net income shrank 10.4% a year, while its earnings per share shrank only 7.3% a year. Most of that gap of 3.1 percentage points a year came from the smaller share count: the number of shares you hold did not change, but each one claimed more of what Nucor earned.
The latest year presents a different picture, as profit recovered following declines in the three previous twelve-month periods. Earnings per share rose 120.6% in the latest twelve months, finishing slightly ahead of the 117.5% rise in net income. Nucor spent $1.08 billion buying back shares over that year. After deducting stock paid to employees, the buyback equaled 1.5% of the company’s market value at the November 11, 2026 close.
How Nucor Pays For Its Buybacks And Dividends
In the latest year, Nucor paid for its buybacks and dividends from surplus cash from making and selling steel. It has no net cash on its balance sheet, where debt exceeded cash and short-term investments by $3.45 billion at the latest quarter end. Nor does Nucor lean on its suppliers: the $2.38 billion it owed them was well under half of its $6.02 billion of inventory.
Steel mills form the core of the business, generating $25.1 billion of revenue in fiscal 2025 compared with $32.5 billion for Nucor as a whole. Over the latest twelve months, Nucor’s operating margin reached 13.3%, climbing from 7.9% a year earlier.
Over that year, Nucor generated $5.32 billion of cash from operations and put half of it into capital spending. The free cash flow left over covered buybacks and dividends 1.7 times.
Could Nucor Keep Buying Back Shares Through 2027?
Nucor’s debt leaves room to keep buying, though the buyback has shrunk before when profit fell. Over the latest twelve months, net debt stood at 0.511 times Nucor’s EBITDA, its earnings before interest, tax, depreciation and amortization. Operating profit covered the interest bill 37.1 times.
Profit is the harder question. In the twelve months to October 2025, when net income fell for a third year in a row, Nucor’s free cash flow was negative $0.331 billion. Buybacks that year came to $0.916 billion, down from $2.08 billion in the twelve months before.
Management has committed to returning at least 40% of net earnings to shareholders each year, maintaining a floor that rises and falls with profit. On the October 27 call, management named two pressures: startup costs at the new mill in West Virginia should stay as high in 2027 as in 2026, or higher, and imports have been increasing in recent months, including a surge from South Korea.
Management also said it expects 2027 to be even stronger, with capital spending falling further. It said 2026 is shaping up to be the third-best financial year in Nucor’s history. The latest year presents a different picture, as profit recovered following declines in the three previous twelve-month periods. Management said it will share its 2027 capital allocation plans on that call.
What Would Selling Nucor Cost You In Tax?
If your shares have gained a lot, selling can bring a big tax bill, and holding keeps the risk. A free 30-minute strategy review with our partner advisory firm covers protecting the gain and a lower-tax way to trim.
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