One of the best benefits of the Registered Retirement Savings Plan (RRSP) is that it can reduce your taxable income. There are many calculators online that help guide you to see how much you can contribute to reduce your taxable income to a new tax bracket. As long as you stay within your deduction limit, this can save you thousands.
Even better, this may increase your tax refund! But don’t go and spend it in one place. I would take your tax refund and invest it in this TSX stock instead.
Nutrien
If there’s one company that still has so much room to grow, it is Nutrien (TSX:NTR). Nutrien stock is a crop nutrient company that’s merging quite a fractured industry. Since coming on the market, Nutrien stock has expanded to become one of the largest crop nutrient producers in the world.
Now, you might recognize the TSX stock from around this time last year. When Russia invaded Ukraine, sanctions were placed against the former country. This included crop nutrients such as potash, nutrients that are necessary to create arable land and keep crops coming in.
Given that Nutrien stock is one of the largest producers, this led to a huge surge in share price of the TSX stock. However, a fall in the market soon came that sent shares of Nutrien stock crashing down. That is why now is one of the best times to buy.
Use now as an opportunity
Nutrien stock might be new, but don’t be fooled. This company has proven itself again and again. The company has not only managed to expand its business due to Russian sanctions, but it’s also expanded through mergers. Furthermore, its e-commerce business continues to thrive.
During the pandemic, the TSX stock became essential for farmers. There were droughts, floods, and more hurting land — land that needed to be arable for farmers to produce food during the pandemic.
Enter Nutrien stock, which created an e-commerce business that continues to thrive. With so much already underway for the company, you’d think its share price would be thriving, too.
And yet…
It’s not. Nutrien stock rose 69% between January and April 2022. It then dropped off by 35% between April and July. Since that point, shares have climbed only slightly — up 5% between July and now. That means there is still time to get in on this stock before it rises again.
And it will rise again. We are merely in a period of poor growth. Yet Nutrien stock is a long-term hold that would be perfect for RRSP investors. You want something essential? That’s food. And food won’t grow without crop nutrients provided by companies like Nutrien.
Don’t think you won’t get anything in the meantime either. Nutrien stock trades at just 5.1 times earnings as of writing, with a dividend yield at 2.78%. So, you can bring in passive income while you wait as well!
Put your RRSP funds from your tax refund to good use. Don’t just spend it on something you’ll regret. Turn it into even more cash! Then you can spend all that on something you’ll probably regret. But at least you’ll probably have cash left over to spare.
