Why I’d Still Buy Nutrien Stock Even Though It’s Down By Almost 30%

Despite showing plenty of volatility this year, Nutrien stock can still be a worthwhile addition to investment portfolios.

| More on:
stocks rising

Image source: Getty Images

The Canadian stock market has been no stranger to volatile conditions in 2022. The S&P/TSX Composite Index has gone up and down several times over the last few months. As of this writing, the Canadian benchmark index is down by 10.2% from its 52-week high. While it is not a full-blown market crash, the equity market does seem like it will remain volatile to round off the year.

Market downturns can be scary, especially since many of the top TSX stocks tend to suffer. However, investors can use the broader decline as an opportunity to find and invest in high-quality stocks trading at discounts. Despite a track record of volatility, a few names might warrant a position in investor portfolios. Nutrien Ltd. (TSX:NTR) is one such stock to consider.

From soaring to all-time highs to being on a roller coaster and dropping in recent weeks, let’s look at why Nutrien stock is an asset I would still have in my portfolio.

An industry game-changer

Nutrien stock is an excellent asset to consider if you want to invest in a game-changing company in its industry. For the longest time, the agriculture industry in Canada was quite fragmented. With its organic and acquisition-based growth in recent years, Nutrien has consolidated the industry.

Through the tremendous work it has done over the years, Nutrien stock has effectively improved how farmers and companies purchase essential nutrients for their crops.

However, volatility came along due to events occurring elsewhere in the world. Russia’s invasion of Ukraine has had a significant impact on global economies across several industries. While the energy industry’s woes have taken the forefront, global agriculture has also suffered due to the resulting sanctions.

Russia is one of the world’s largest and cheapest potash producers. The sanctions resulted in a greater amount of business moving to Nutrien.

The sudden shift saw Nutrien stock soar to all-time highs of around $148, up from $87 at the start of 2022. While a growing valuation is generally good news, Nutrien stock flew too high too fast. Its unsustainable growth inevitably pointed toward a decline.

The decline

And it did not take long for the downturn to come along. As the markets became increasingly volatile, the broader market decline saw a sell-off across the board, including Nutrien stock. The company’s fundamentals did not change much. However, the Nutrien share price fell on the stock market regardless of major developments.

Peak to trough, Nutrien stock declined by almost 36% between April 18 and July 14, 2022. After that, the stock started gradually recovering before another steep decline a few weeks ago after the company missed its earnings targets. As of this writing, Nutrien stock trades for $104.80 per share, down by almost 30% from its all-time high.

Foolish takeaway

Shrugging off its earnings estimate miss, Nutrien stock produced record results for its third quarter of fiscal 2022. Potash continues to attract significant demand, and the company is expected to deliver stronger results in the coming quarters.

Despite all the volatility right now, Nutrien stock looks well-positioned to exhibit stellar growth in the coming months. Today could be a favourable time to establish a position in the volatile agriculture stock.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Level Up Your Passive Income With 3 High-Yielding Stocks

Given their solid underlying businesses and high dividend yields, these three companies are an excellent buy for income-seeking investors.

Read more »

Man data analyze
Dividend Stocks

Beat the TSX With This Unstoppable Dividend Payer

BCE Inc. (TSX:BCE) could outperform the market with its dividend growth.

Read more »

Profit dial turned up to maximum
Dividend Stocks

Canadian Tire Stock Rose 15% in January 2023

Canadian Tire (TSX:CTC.A) stock continues to climb upwards yet still trades in value territory and with a solid dividend, as…

Read more »

Canadian Dollars
Dividend Stocks

TFSA Investors: Where to Invest $6,500 in 2023

Here are three TSX stocks for TFSA investors.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

3 Cheap Stocks for Premium Passive Income

These cheap stocks not only offer strong passive income, they also have been climbing higher in the last month.

Read more »

Payday ringed on a calendar
Dividend Stocks

Need $100? The Best Dividend Stocks for Monthly Income

These two dividend stocks are the best choices on the market if you want the best bang for your buck…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

Should You Invest in A&W Revenue Royalties Income Fund for its 5.1% Dividend Yield?

The A&W Revenue Royalties Income Fund is a top bet for income-seeking investors given its dividend yield of 5.1%.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA Retirees: How to Supplement Your CPP and OAS Payout in 2023

Blue-chip dividend stocks can help retirees create a recurring revenue stream to support CPP and OAS payouts in 2023.

Read more »