How This Steel Company Increased Its Dividend by a Huge 31%!
Steel Dynamics (NASDAQ: STLD) is one of the largest steel makers in North America, built from the ground up by alumni of Nucor (NYSE: NUE), the biggest domestic player. Steel Dynamics has been growing its business and dividend quickly, but the most recent dividend increase was different. Here's the backstory for Steel Dynamics' massive 31% dividend hike.
Over the past decade, Steel Dynamics has increased its dividend at a compound annual rate of roughly 10%. That's a pretty big number for any company, let alone one that operates in a highly cyclical industry like steel. The relatively young company has a 12-year streak of annual dividend increases under its belt. For context, Nucor's annual streak is around 50 years long, but its average dividend increase over the past decade was only in the low single digits.
Here's the thing: In late 2021, Nucor hiked its dividend by an outsized 23%. Steel Dynamics, essentially, followed along on that path, hiking its dividend by 31% in the first quarter of 2022. There are two pieces here that need to be broken apart to fully understand the logic in play for these increases.
Source Fool.com
