Nucor Authorizes a $4 Billion Share Repurchase – Buyback Wednesdays

What do lumber, lithium and steel have in common? Each of them are commodities that saw massive price increases during the pandemic and subsequent pullbacks. Demand for housing, electric cars and construction drove the big increase in prices for these commodities and the companies that produced them posted record profits.

On Sunday we wrote about lithium producer Albemarle Corp (ALB) for our Insider Weekends article after both the CEO and General Counsel of the company purchased shares. Today we are exploring one of the largest and oldest steel companies in the U.S., Nucor Corporation (NUE), which announced a massive stock buyback program that replaces its prior equally massive repurchase program.

As you can see from the following 5-year price chart of steel rebar from Trading Economics, steel prices have reverted to the mean after rising to over 6,000 Chinese Yuan per metric ton. Nucor was a huge beneficiary of this jump in steel prices with earnings increasing from just $4.14 per share in 2019 to a whopping $28.79 per share in 2022. The company is expected to earn a little less than $15 per share this year, reflecting the fact that steel prices have come down to earth.

Steel is a wonderful metal that forms the backbone of modernization. It is required to build almost everything. Steel goes in the making of bridges, warehouses, infrastructure and increasingly in alternative energy projects like solar panels and wind turbines.

Founded in 1905 and headquartered in Charlotte, North Carolina, Nucor manufactures high-quality steel and steel products for its customers. Nucor’s revenue comes from three segments: steel mills, steel products, and raw materials.
It is also North America’s largest recycler. Nucor’s steel products are made from an average of 75.4% recycled content. Some of the products contain almost 100% recycled content.

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