1 Dividend King Stock That Just Got a Huge Endorsement from Billionaire Warren Buffett's Berkshire Hathaway

Key Points

• Berkshire Hathaway built a 3% position in Nucor in the first six months of 2025.

• Warren Buffett and his team could be expecting a recovery in the housing sector.

• Another boost in 2025 will be Nucor's 53rd consecutive year of increasing its dividend.

• 10 stocks we like better than Nucor ›

Investing with Warren Buffett has long been a good strategy. Berkshire Hathaway stock has gained far more than the S&P 500 and other major indexes over the past three decades. So it's understandable that investors closely monitor what individual stocks Berkshire buys.

Berkshire just added a new name to its large equity portfolio, and it's a company that might appeal to both income and growth investors. Nucor (NYSE: NUE) is North America's largest steel and steel products company, and Berkshire's endorsement may signal a timely way to beat the S&P 500 in the coming months and years.

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Nucor's free cash flow is about to surge

Steel is a capital-intensive business. Nucor has invested more than $15 billion to grow the company since 2017. It expanded existing facilities, built new greenfield plants, and made acquisitions. Many of those investments are now generating revenue and cash flow. With equipment up and running, Nucor's capital spending will slow in the coming quarterly periods.

Nucor CFO Steve Laxton noted that in the company's second-quarter earnings call. He told investors the company expects "a dramatic change in free cash flow profile in the back half of the year compared with the first half of the year." He added that lower capital spending and market conditions "set up a very nice free cash flow outlook for the second half."

That's likely one reason Nucor was added to Berkshire's portfolio this year. Buffett and his investing team built a 3% stake in the steelmaker over the first six months of the year. Other stocks Berkshire added were homebuilders D.R. Horton and Lennar. That could indicate Buffett and his team see tailwinds coming from a resurgence in housing.

Nucor is also one of the market's elite Dividend Kings with an expected increase in 2025 being its 53rd consecutive annual raise. Only companies that have increased dividends at least 50 straight years qualify as Dividend Kings. That income could add to shareholder returns as macro tailwinds and growth investments drive its earnings potential.

Should you invest $1,000 in Nucor right now?

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Howard Smith has positions in Berkshire Hathaway and Nucor. The Motley Fool has positions in and recommends Berkshire Hathaway, D.R. Horton, and Lennar. The Motley Fool has a disclosure policy.