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 Colliers International Group right now?

Before you buy stock in Colliers International Group, 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 Colliers International Group 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

Canada day banner background design of flag
Dividend Stocks

Top Canadian Stocks to Buy Right Now With $5,000

Looking for some safe, long-term stocks? These Canadian stocks are where you should look first.

Read more »

Car, EV, electric vehicle
Dividend Stocks

Outlook for Magna Stock in 2025

Magna stock has sunk into the toilet, but it could now be one of the best undervalued stocks out there.

Read more »

alcohol
Dividend Stocks

Why I’d Consider These 3 Blue-Chip Dividend Stocks for a $20,000 Lifelong Investment

In a market correction, it’s essential to focus on blue-chip stocks that offer stability and long-term growth potential.

Read more »

Canadian dollars are printed
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $14,000

Investing a total of $14,000 across these three stocks could earn you more than $1,039 in tax-free income each year.

Read more »

coins jump into piggy bank
Dividend Stocks

Where I’d Invest $12,000 in Canadian Stocks for Reliable Dividends

Want reliable dividends? Here's a trio of stocks that can provide a juicy income stacked for growth, even with a…

Read more »

Young Boy with Jet Pack Dreams of Flying
Dividend Stocks

Beginner Investors: 4 Top Canadians Stocks to Buy in 2025

If you're new to investing and looking for some Canadian stocks that are worry free, here's where to go.

Read more »

protect, safe, trust
Dividend Stocks

3 Canadian Stocks to Play Defence in a Trade War

Are you wondering what stocks could be safe to buy and hold through the market turmoil? Here are three to…

Read more »

A meter measures energy use.
Dividend Stocks

2 Canadian Utility Stocks to Buy and Hold for Lifelong Income

Here are two Canadian utility stocks you can buy and generate a steady stream of dividend income in 2025 and…

Read more »