It's hard to find ways to innovate in a traditionally boring factory-run business like steelmaking, but Nucor Corporation (NUE -0.61%) is an exception, having successfully carved out a niche for itself as an innovative leader in the steel industry. The company not only leads the pack in terms of sales and profits today but has earned shareholders some of the strongest returns in the industry over the decades.

Say, anyone who'd invested in Nucor stock at the beginning of the decade would own a six-bagger today. Or picture this: Until early 1980, Nucor was trading for less than a dollar. Today, the stock's fetching around $60. Counting dividends -- Nucor has successfully increased its dividends every year for 45 consecutive years -- Nucor has made long-term investors multimillionaires. Can the stock continue to generate such solid returns?

Why Nucor has remained a favorite steel stock among investors

In a press release from 2002, Nucor elucidated how late former CEO Ken Iverson catapulted Nucor to the forefront in the steel industry. Two points stood out in the release that still holds water: Nucor's low-cost production methods and employee programs.

A signboard saying millionaire and pointing towards next exit with blue sky in the background.

Can Nucor stock make you a millionaire? Image source: Getty Images.

You see, while most steel companies use blast furnaces that require a huge factory set up to manufacture steel, Nucor operates electric arc furnaces and "mini-mills." Mini-mills typically use scrap -- sourced from, say used automobiles and machinery -- and melt it in electric furnaces to produce steel. The method is not only cost effective but makes it easy for a company to start and stop electric-arc furnaces inexpensively to adjust production volumes to end-market conditions.

This flexibility is a huge advantage to have in a cyclical business, which is why rivals like United States Steel Company (X 0.20%) and AK Steel Holding Corporation (AKS) floundered during challenging times. Steel Dynamics (STLD -0.61%) is the only notable exception as it also uses electric-arc furnaces, pretty much like Nucor, and has incredibly low labor costs.

NUE Operating Margin (Annual) Chart

NUE operating margin (annual). Data by YCharts.

Talking about labor, Nucor never felt the need to lay off employees in its long history unlike U.S. Steel or AK Steel, thanks to its non-unionized labor force and production-linked performance bonuses. That's a remarkable feat, one which the market appears to have acknowledged over the years. At the same time, Nucor has used every downturn as an opportunity to acquire low-priced businesses and expand facilities. While companies like U.S. Steel are struggling with internal inefficiencies, Nucor is reaping the fruits of its strategy.

A couple of other things have instilled investor confidence in Nucor over the years, such as its financial fortitude and commitment to shareholders. Consider that Nucor was free-cash-flow positive in nine out of the past 10 years and maintained debt at reasonable levels. In FY 2017, Nucor's debt-to-equity ratio was down to only 37%, among the lowest in the industry. And as I already mentioned above, Nucor's dividend history is among the best that you can find in not just steel but most cyclical industries.

It's no surprise, then, that Nucor has helped patient investors turn some thousands of dollars into millions over the years.

What Nucor needs to do to remain a winning stock

Nucor recently delivered its most profitable year since 2009. This could just be the beginning, simply because Nucor's fundamentals remain as strong as ever. Today, Nucor operates 25 scrap-based steel mills and is the largest recycler in North America.

Steel is an essential raw material for several key sectors and industries, including automotive, manufacturing, construction, transportation, and energy. Nucor is a global company that's poised to be one of the biggest beneficiaries as demand for steel rises. All that the company needs to do is stick to its disciplined capital allocation policies that prioritize growth while ensuring rich rewards to shareholders. Here's a nice chart that gives you an overview of Nucor's capital allocation over the years.

A chart showing Nucor's operating cash flows, capital expenditures, and capital returned between 2008 and 2017.

Image source: Nucor.

If Nucor can continue to grow its book value per share like it has in recent years, there is no reason why the stock price shouldn't follow.

NUE Book Value (Per Share) Chart

NUE book value (per share). Data by YCharts.

At a price to book value of 2.2 times, Nucor may not fall into your typical value category right now, but the stock deserves a premium for several of the factors discussed above. Nucor could win big as infrastructure spending in the U.S. takes off, and going by its last year's numbers, you wouldn't think much about buying Nucor for the long term.