Shares of Agrium Inc. (TSX:AGU)(NYSE:AGU) have risen more than 130% in the past five years and dividend investors are wondering if a recent pause in the rally is a signal to harvest their profits or buy more shares.

Let’s take a look at the current situation to see if Agrium still deserves to be in your dividend portfolio.

Crop nutrients outlook

Agrium is one of the world’s largest producers of crop nutrients and the biggest retailer of seed and crop protection solutions.

To get an understanding of the demand for Agrium’s products we just have to look at the forecasts for global population growth. At the moment, experts say there are more than seven billion people on the planet. In the next 35 years, that number is expected to be as high as 11 billion.

To feed all these new mouths, farmers will have to produce more crops. That is going to be a challenge, especially when the amount of arable land continues to decrease.

In the next 15 years, Agrium expects the annual consumption of grain and oil seeds to jump by 1.6 billion tonnes. To meet that demand, farmers will have to spend an additional $3 billion on seed and crop protection products and use an additional 58 million tonnes of potash, nitrogen, and phosphate.

Agrium produces all of these products.

Diversified lines of business

Agrium operates as a wholesale producer of crop nutrients and as a retailer of farm products. This is unique in the fertilizer industry and the integrated model serves the company and its investors well because it provides revenue stability.

Agrium’s wholesale operations include the production of nitrogen, potash, and phosphate—the core crop nutrients used to enhance yields. Without fertilizers, food production would drop by half.

Earnings in the wholesale business can be volatile. As an example, Potash prices dropped by 25% two years ago when a couple of the world’s largest producers decided to disband their cartel and set off a battle for market share. Prices are slowly recovering, but it is taking longer than analysts had expected.

Nitrogen margins are dependent on the price of natural gas, which is the main input cost. The gas market also sees periods of volatility. At the moment, natural gas prices are extremely low and that situation should continue for some time, which should bode well for Agrium’s profits.

On the retail side, Agrium operates the world’s largest network of stores that supply growers with seed and crop protection products. In fact, more than 500,000 farmers buy from Agrium’s centres located in North America, Australia, and South America.

The retail division continues to grow and provides a stable and reliable income stream.

Increased production

Agrium just wrapped up the tie-in of a major expansion at its Vanscoy potash facility. Production capacity at Vanscoy is now 40% higher and the completion of the project is well timed, as potash demand is hitting record levels.

The company is also expanding its nitrogen capacity at its Borger facility in Texas. The US$720 million project will increase the plant’s capacity by 30% and enhance Agrium’s position as one of the world’s lowest-cost nitrogen producers.

Dividend growth

Agrium is an ATM machine. The company recently increased its dividend payout by 12% to US$3.50 per share, which yields about 3.3%. With the major capital projects coming to completion this year, Agrium is targeting a higher payout ratio for the dividend and this means investors should see continued growth in the distribution.

Should you buy?

Agrium is one of those companies that you can simply buy and forget about for decades. I think long-term dividend investors should see the recent pullback as an opportunity to buy the stock.

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Fool contributor Andrew Walker has no position in any stocks mentioned. Agrium is a recommendation of Stock Advisor Canada.