The Biggest Problem Facing This Dividend Aristocrat

Nucor Corporation (NYSE: NUE) has managed its way through a long steel industry downturn in relative stride, expanding its streak of annual dividend increases to 44 years. However, don't look at the company's second-quarter earnings strength and continued dividend hikes and think that it doesn't face the same threats every other U.S. steel maker has to deal with. One of the big issues recently has been overcapacity, which is an issue that hasn't gone away even though the U.S. steel industry has rebounded.

Like most U.S. steel mills, Nucor struggled at the tail end of the deep 2007 to 2009 recession. That was basically the start of a long steel industry downturn in the United States. As you would expect in a recession, falling demand was a big issue. Nucor's steel shipments fell 33% between 2008 and 2009. It was so bad that Nucor was pushed into the red, losing $0.94 a share in 2009.

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Source: Fool.com