NUE vs. STLD: Which US Steel Giant Deserves a Spot in Your Portfolio?

Anindya Barman September 17, 2025

STLD NUE

Better trading starts here.

What would you like to follow?

Anindya Barman

Analyst Blog

Cancel

Key Takeaways

{\"0\":\"Nucor is expanding with new mills, acquisitions, and steady dividends backed by strong liquidity.\",\"1\":\"Steel Dynamics is ramping its Sinton mill, aluminum projects and boosting shareholder returns.\",\"2\":\"STLD trades at a lower valuation, offers higher dividend growth and delivers higher return on equity.\"}

Nucor Corporation (NUE - Free Report) and Steel Dynamics, Inc. (STLD - Free Report) are two of the leading steel producers in the United States, often regarded as bellwethers for the domestic steel industry. Both have strong domestic footprints and play crucial roles in supplying steel for construction, automotive and industrial markets. With their similar business models and exposure to U.S. steel demand, they are natural candidates for a head-to-head comparison.

U.S. steel prices have retreated amid cautious buyer activity. The Trump administration's imposition of a 25% tariff on all steel imports into the United States in March 2025 led to a surge in benchmark hot-rolled coil (HRC) prices to a peak of nearly $950 per short ton. While the administration's early June doubling of steel tariffs to 50% and the consequent steel mill price hikes triggered only a temporary lift, these failed to effectively drive up HRC prices further to new highs as intended. Overall demand weakness and abundant steel mill output have put a pause on a sustained price rally, dragging HRC prices below the $800 per short ton level.

Let’s dive deep and closely compare the fundamentals of these two major U.S. steel producers to determine which one is a better investment option now amid the current steel pricing and demand environment.

The Case for Nucor

The biggest steel producer in North America, Nucor, remains committed to boosting production capacity, which should drive profitable growth and strengthen its position as a low-cost producer. The company is executing a series of growth projects to tap significant end-market demand. Nucor is seeing strong demand from construction & infrastructure, military & defense, and energy end markets and has a healthy order backlog. The company has already commissioned some of its growth projects with Gallatin and Brandenburg mills, showing strong production and shipment performance. NUE is currently executing several major growth projects, including the Apple Grove, WV, sheet mill (the largest project), the Lexington, NC, rebar micro mill, and the galvanizing line at the Berkeley County sheet mill.

The company has been focusing on growth through strategic acquisitions over the past several years. The recent acquisition of Southwest Data Products expanded its growing portfolio of solutions for data center customers. The buyout of Rytec Corporation will also allow Nucor to further expand beyond its core steelmaking businesses into related downstream businesses. Adding high-performance doors is expected to create cross-selling opportunities with other Nucor businesses and significantly expand its product portfolio for the commercial space.

Nucor is maximizing its returns to shareholders by leveraging its strong balance sheet and cash flows. It ended second-quarter 2025 with strong liquidity of roughly $3.4 billion. The company amended and restated its revolving credit facility on March 11, 2025, to increase its borrowing capacity to $2.25 billion from $1.75 billion and extend its maturity date to March 11, 2030.

Nucor has returned around $13.2 billion to its shareholders through dividends and share repurchases since 2020. It returned $758 million to its shareholders through dividends and share repurchases in the first half of 2025. The company, in December 2024, raised its quarterly dividend to 55 cents per share from 54 cents. Nucor has increased its regular dividend for 52 straight years since it started paying dividends in 1973. It remains committed to returning at least 40% of annual net earnings to its shareholders.

NUE offers a dividend yield of 1.6% at the current stock price. Its payout ratio is 36% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of 7.5%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.

Nucor, however, is exposed to demand weakness in certain markets such as heavy equipment, rail cars, truck and trailer and agriculture. Heavy equipment, transportation and logistics and other accounted for around 28% of its total external shipments for 2024.

The company is experiencing softness in heavy equipment since the second half of 2023. High interest rates are impacting demand for earth-moving machinery, tractors and rail cars. As such, Nucor’s shipment volumes are expected to remain under pressure in these markets in the near term.

The Case for Steel Dynamics

Steel Dynamics' customer-focused approach, along with market diversification and low-cost operating platforms, positions it for future growth opportunities. The company should also gain from its investments in beefing up capacity and upgrading facilities.

STLD is seeing strong customer order activity for flat-rolled steel. It is currently executing several projects that should add to its capacity and boost profitability. STLD is ramping up operations at its new state-of-the-art electric arc furnace flat-rolled steel mill in Sinton, TX. With a production capacity of roughly three million tons per year and the capability to make the latest generation of advanced high-strength steel products, it is expected to contribute significantly to revenues and profitability.

The value-added flat-rolled steel coating lines, consisting of two paint lines and two galvanizing lines, also enhance the annual value-added flat-rolled steel capacity. The company is ramping up volumes from these lines, which are expected to provide earnings benefits in 2025. Steel Dynamics' $2.7 billion investment in a new state-of-the-art low-carbon aluminum flat rolled mill and two aluminum slab centers also boosts its strategic growth.

The company is poised to benefit from strong cash flow generation, allowing it to invest in organic growth and maximize shareholder value. It generated solid cash flow from operations of $1.8 billion in 2024. It ended second-quarter 2025 with strong liquidity of around $1.9 billion. It has ample liquidity to meet its debt obligations.

Steel Dynamics also raised its quarterly dividend by 9% to 50 cents per share in February 2025. The company repurchased shares worth $450 million during the first half of 2025. STLD offers a dividend yield of 1.5% at the current stock price. It has a payout ratio of 29%, with a five-year annualized dividend growth rate of about 18.3%.

Automotive is a significant market for Steel Dynamics. A slowdown in global automotive production curtailed steel consumption in this key end market in 2024. Demand from this key sector slowed significantly in the second half of 2024. North American automotive build rates declined considerably during the second half. High interest rates, along with concerns over economic slowdown and tariffs, are likely to put pressure on the automotive market in 2025. Auto and auto part tariffs are likely to affect automotive production in North America this year. This may impact the company’s shipment volumes to this key market.

NUE & STLD: Price Performance, Valuation & Other Comparisons

The NUE stock is up 22.4% year to date, while STLD has gained 22.4% compared with the Zacks Steel Producers industry’s rise of 24.1%.