Stocks

Nucor Corporation, which makes steel, is putting money away for future growth

Since the beginning of the year, shares of Nucor Corporation (NKE), a steel company, have gone down 1.4% to $112.57 on June 16. The price of steel continues to go up and down with the price of steel. But Nucor has good news for people who invest for the long term.

In 2021, Nucor made a record profit, and steel prices were also high a year earlier, at the height of the COVID-19 crisis. Compared to these two years, it’s unlikely that 2022 will be able to show stronger signs. But Nucor decided to use the money it got during the “hot” time for strategic acquisitions, which are long-term investments. For instance, Nucor just bought Summit Utility Structures, which makes supports for power lines. These are modern steel structures that are built ahead of time and can be easily moved, put together by small groups of experts, and taken apart if necessary.

With this purchase, Nucor is putting all of its business operations under one roof. In the United States, electric networks are being updated all the time, and new lines from solar and wind power plants are part of this. Nucor can make more money from the Summit Utility business by using its facilities for making steel. At the moment, there are plans to expand this business into new areas of transportation and telecommunications. In the next few years, Nucor plans to spend more on infrastructure projects in the United States. This will increase the amount of steel supplied, but at the same time, Nucor wants to grow in areas where it can make more money than just supplying metal. Nucor also puts a lot of money into growing its business so it can be a leader in areas that don’t change much. If the plan works, the shares of the company may become less volatile.

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