Nucor Corporation ( NUE Quick Quote NUE - Free Report) recently stated that it has entered into a 15-year Virtual Power Purchase Agreement (“VPPA”) with EDF Renewables North America (“EDFR”) for 250 megawatts of new solar energy in Texas.
Notably, this is Nucor’s first VPPA agreement and is the largest of its kind in the steel space. It enables EDFR to increase clean energy to the region's power grid. Nucor is one of the cleanest steel producers across the globe and the move will help the company lower its carbon footprint. Nucor is presently North America's largest recycler and this deal further highlights its commitment to sustainable steelmaking.
The company expects the construction of EDFR's solar project to start in 2022 and electricity production is anticipated to begin in 2023. The solar project is expected to yield an annual output that will be equivalent to electricity consumed by almost 50,000 average Texas homes.
Further, Nucor's decision to secure solar energy enables this project to move forward into construction. This is likely to boost local economy by creation of new construction jobs and expanded tax base.
Shares of Nucor have lost 0.9% in a year against the
industry’s 8.2% rise.
In third-quarter earnings call, Nucor stated that it expects higher earnings in the fourth quarter compared with third-quarter levels. The projected upside is mainly due to improved pricing at its sheet and plate mills. The company also expects raw materials unit’s earnings to increase sequentially in the fourth quarter. This will be driven by improved margins at its direct reduced iron facilities.
Zacks Rank & Key Picks
Nucor currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are
Agnico Eagle Mines Limited ( AEM Quick Quote AEM - Free Report) , Barrick Gold Corporation ( GOLD Quick Quote GOLD - Free Report) and New Gold Inc. ( NGD Quick Quote NGD - Free Report) . While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), New Gold and Barrick carry a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here
Agnico Eagle has an expected earnings growth rate of 103.1% for 2020. Its shares have returned 21.3% in the past year.
Barrick has an expected earnings growth rate of 115.7% for 2020. The company’s shares have gained 51.4% in the past year.
New Gold has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 137.5% in the past year.
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