Fundamental analys of Nucor, July 15, 2017

Description:

Nucor is an American steel producer that sells steel and steel products in the United States and internationally. Their headquarters are in Charlotte, North Carolina.

Valuation:

At $60 and 24 times trailing earnings, Nucor is expensive. When looking at an average of the past three years’ earnings the P/E ratio comes in at 37 which is a lot of money.

The Price to book value is also high at 3.6.

Balance sheet:

The Balance Sheet of course looks good. In the end, this is what the market is paying for. Their Debt to equity ratio is 0.8 which is considered low risk and their Working capital is $4.1 billion which at least means that they can pay their short-term bills.

Free cash flow and dividend:

Last year Nucor had a Free Cash Flow of $1.1 billion which equates to $3.50 a share. Of this they are paying a dividend of $1.49 which means that the current yield is 2.5%.

Nucor is part of The Dividend Aristocrats which means that they have been paying out uninterrupted and increasing dividends for more than 25 years.

Conclusion:

If the share had been 30 per cent cheaper I would have been a buyer. Now it is too expensive for my taste.

 If you would like to learn more about fundamental analysis you can do that here.

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