Down 52% From All-Time Highs, Is Nutrien Stock a Good Buy?

Nutrien is a beaten-down TSX stock that offers shareholders a tasty yield of 4.1%, making it attractive to income investors.

| More on:
A tractor harvests lentils.

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Valued at $34.3 billion by market cap, Nutrien (TSX:NTR) provides crop inputs and services. It operates through four business segments:

  • Retail: It distributes crop nutrients, crop protection products, seeds, and merchandise products.
  • Potash: It provides granular and standard potash products.
  • Nitrogen: It offers ammonia, urea, nitrogen solutions, nitrates, and sulfates.
  • Phosphate: It provides solid fertilizer, liquid fertilizer, and industrial and feed products.

The company provides services directly to growers through a network of farm centers in the Americas and Australia. Nutrien went public in early 2018 and has since returned 26% to shareholders after adjusting for dividend reinvestments. Comparatively, the TSX index has returned over 70% to shareholders since Nutrien’s initial public offering.

Created with Highcharts 11.4.3Nutrien PriceZoom1M3M6MYTD1Y5Y10YALL23 Jul 201822 Jul 2024Zoom ▾2019202020212022202320242020202020222022202420240www.fool.ca

Down 52% from all-time highs, Nutrien offers shareholders a forward dividend yield of over 4%, given its annual payout of $2.96 per share. Let’s see if Nutrien stock is a good buy right now.

Is Nutrien stock a good buy right now?

Nutrien operates an extensive crop inputs and services ecosystem with low-cost upstream production assets, a global supply chain, and a downstream retail channel. Its differentiated business model is centred on the company’s ability to efficiently produce and distribute the products and services required across key agriculture markets around the globe.

Nutrien has focused on prioritizing initiatives that enhance its ability to serve farmers in core markets while improving earnings and cash flow.

For example, Nutrien has prioritized investments to enhance its North American fertilizer production assets and product capabilities to strengthen its global distribution network and grow in core downstream retail markets.

Further, Nutrien is accelerating operational efficiency objectives through the deployment of automation and other initiatives in potash. It is also optimizing the downstream retail network through modernization and consolidation initiatives in North America and a targeted margin improvement plan in Brazil.

A focus on scalable growth

Nutrien is targeting potash and nitrogen sales volume growth of between two to three million tonnes by 2026 compared to 2023. It also expects retail adjusted EBITDA (earnings between interest, tax, depreciation, and amortization) between $1.9 billion and $2.1 billion in 2026, which includes a goal of $1.4 billion in gross margin from its proprietary products portfolio. Basically, Nutrien aims to utilize competitive advantages to deliver scalable growth.

Amid a challenging macro backdrop, Nutrien intends to reduce controllable costs across its operations by $200 million by 2026 and invest between $2.2 billion and $2.3 billion towards capital expenditures through 2026.

What is the target price for Nutrien stock?

Nutrien is part of the agriculture sector, which is fairly recession-proof. However, it also trades in commodities, making it highly cyclical. The stock gained significant pace amid an inflationary environment, rising over 100% between late 2020 and April 2021.

As commodity prices cool off, analysts expect Nutrien to report adjusted earnings per share of $5.33 below earnings of $6.07 per share in 2023.

Priced at 13 times forward earnings, Nutrien stock is quite cheap, given its high dividend yield. Analysts, too, remain bullish and expect the stock to surge 30% in the next 12 months.

Should you invest $1,000 in Dream Office Real Estate Investment Trust right now?

Before you buy stock in Dream Office Real Estate Investment Trust, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Dream Office Real Estate Investment Trust wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »