Long-term investing isn’t what it used to be.
With liquidity on the rise, the long-term investment horizon has shrunk substantially over the years, and with discount brokerages racing to eliminate fees altogether, the new definition of a long-term horizon will likely be measured in months, not years.
While the set-and-forget (or Charlie Munger’s sit-on-your-bum) approach to investing is losing its lustre with the continued rise of technological disruption, there are still “old-school” companies out there that one can comfortably hold for decades at a time.
Nutrien, the Canadian fertilizer kingpin and the larger potash producer on the planet, has been feeling the long-lasting adverse effects of a low commodity price environment for quite some time.
Shares have picked up negative momentum over the past year, and with the stock in bear market territory (26% off from 2018 highs), the stock now has a ridiculously cheap valuation alongside a handsome dividend with a yield that’s close to the highest it’s been in recent memory at 4.3%.
Sure, Potash Corp. sported a higher dividend yield in the past, but it didn’t end well. The merger with Agrium provides Nutrien with a retail edge that can help keep the dividend intact as agricultural commodities look to bounce back.
As you may be aware, I’m a huge fan of commodity plays that can continue rewarding investors with dividends (and dividend hikes) despite unfavourable commodity price conditions.
At these depths, Nutrien is a dirt-cheap stock that could pay big dividends if you stash it your portfolio and forget about it.
Jamieson is a company that’s been in business for nearly a century. During this time, it’s built a considerable amount of brand equity for itself through its high-quality products trusted by Canadians for generations.
For many Canadians, they reach for the green-capped product at the vitamin aisle of their grocery store without giving too much thought about it.
The stock went public just a few years ago, and although you’d think an investment in a vitamin-maker isn’t at all lucrative, you’d be wrong given the massive growth runway in China, where Jamieson is a top foreign brand, and the fact that the company now has the capital it needs to add innovative new offerings to its roster of VMS (vitamins, minerals and supplements) products.
The business of vitamins hasn’t changed much over the last century, and I’d say it’s unlikely to change over the next century. The stock trades at just three times sales and 4.1 times book at the time of writing, which is far too cheap given the high double-digit growth potential.
As a small-cap stock with a $1 billion market cap, Jamieson stock remains under the radar of most value-conscious growth investors.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd.