Down 46%, This Magnificent Dividend Stock Is a Screaming Buy

This dividend stock is down 46% from all-time highs, providing a stellar 4.04% dividend as of writing, as the company rises higher in 2024.

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I want you to think back for a moment to April 2022. We were just coming into our own on the markets, yet there was one dividend stock that was absolutely dominating. That dividend stock was Nutrien (TSX:NTR). While it came from a tragic situation, shares of Nutrien stock surged as the company benefited from sanctions placed against Russia after the invasion of Ukraine.

Yet it didn’t last long. The market started to drop, and so did Nutrien stock. It’s trading at about half of all-time highs. And yet, now could be the perfect time to jump back in.

What happened?

The drop came mainly from the company being overpriced during this time. The price of potash surged with sanctions against Russia, a large potash producer and at far lower prices. However, the price of potash then came down as it started to flood the market. And that led to lower results for Nutrien stock as well.

This led to a rough 2023 for the company. Nutrien stock price fell further and further, with perhaps a few positive bumps along the way. Earnings continued to demonstrate that while production was up, prices of potash and other fertilizers were down. And that produced overall negativity amongst investors.

That being said, there is some more momentum investors will want to consider for Nutrien stock these days. So, let’s get into that and why shares are moving upwards.

Shares up once more

Nutrien stock has been up since the beginning of January, perhaps motioning for a shifting of the tides for investors in the fertilizer stock — not just during the third-quarter release but the fourth-quarter and full-year results.

The third quarter demonstrated net earnings of US$1.1 billion, with diluted earnings per share (EPS) of US$2.18, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$5 billion. This was the first demonstration that potash and fertilizer prices were starting to recover. 

The company delivered record potash sales, and demand continued to increase, with market stability helping as well. And this continued in the fourth quarter. Net earnings hit US$1.3 billion, at US$2.53 diluted EPS. Adjusted EBITDA hit US$6.1 billion as well. So, while still down year over year, there is certainly positivity in the markets once more.

Outlook

Of course, we cannot forget about the outlook, which is potentially why Nutrien stock has been climbing higher in the last month. The company reported that global rain stocks-to-use remain low, with crop prices declining from historic highs. That looks to change this year, with global potash demand strong in the second half of 2023. 

Nutrien stock now expects full-year shipments between 67 and 68 million tonnes. This comes from more increased imports in markets such as North America, China, and Brazil. Furthermore, the company expects potash demand to continue climbing in 2024, recovering as the global market balances out.

Financially speaking, Nutrien stock expects retail adjusted EBITDA to increase from US$1.5 billion in 2023 to between US$1.65 and US$1.8 billion in 2024 — all while potash sales climb.

So, with shares climbing and a 4.04% dividend yield, this is certainly a time to consider the dividend stock on the TSX today. 

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien. The Motley Fool has a disclosure policy.

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