It’s looks like the worst might be over. Tax-Free Savings Account (TFSA) investors may actually be able to take a sigh of relief, as their stocks finally start turning in the positive direction after well over a year of falls.
It all started back in December 2017, when the oil and gas glut in Canada started to affect the markets. From there, the cannabis industry went from boom to bust after legalization in October 2018. Then after months of dips with analysts expecting the worst at any moment, the crash finally came.
TFSAs crash everywhere
The coupling of Saudi Arabia and Russia stating they would be keeping up oil production with the coronavirus outbreak has destroyed the markets. The S&P/TSX Composite fell 40% from peak to trough in less than a month. Yet since then, stocks have come back up, albeit quite slowly.
So, that leaves little time for investors to take advantage of the market while it’s still down. While almost all stocks are still down in the dumps, there are a few winners that won’t stay there for long. In fact, there are even some that shouldn’t have fallen in the first place. These are the ones TFSA investors should be keeping their eyes squarely on.
If there’s one winner out there that I would consider as an investor, it would be Nutrien (TSX:NTR)(NYSE:NTR). This stock fell about 46% from January to March and has since started the climb back up. As of writing, the stock has grown 47% since bottoming out.
As a TFSA investor, Nutrien is a solid opportunity to make serious cash. The company is the world’s largest producer of crop nutrients. The company produces and distributes potash, nitrogen, and phosphate products around the world, products that will be sorely needed in the years to come.
That’s because as the world’s arable land becomes less and less, the earth’s population will only become more and more. Countries will need nutrients for farmland to feed the growing mass of people, and so companies like Nutrien will need to have nutrients available to make sure food will end up on the table. While there are multiple companies out there that produce and distribute these products, Nutrien is well ahead of the curve.
Nutrien as been acquiring small companies for years now, creating a one-stop shop in a highly fragmented industry. The company has also set up shop around the world, including in the densely populated countries of India and China, where arable land is practically scarce. As of writing, the company takes up 20% of the market share in this industry.
The one downside to Nutrien is, it’s a new company, so it doesn’t have all that much information to fall back on when it comes to stock history. This can be considered less than ideal to investors looking for a stable stock. But as I say, this is an opportunity, and one supported by analysts.
Right now, the stock trades at a discount of 70% just to reach its fair value price. By 2021, analysts believe the stock will already have hit that price point and could soar even higher in that time. That would be an increase of 23% in just two years. Honestly, there’s no reason why the stock couldn’t continue that trajectory after the crash, making it a solid investment for long-term buyers. Especially with the stock’s amazing 5.22% dividend yield.
If that’s the case, a $10,000 investment in your TFSA today could make you $423,619.55 in 22 years with dividends reinvested.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd.