Is Nutrien Stock a Buy for its 4.2% Dividend Yield?

Besides its stable dividends, Nutrien’s strong presence in the global crop input industry makes it an attractive stock for long-term income-seeking investors.

| More on:
farmer holds box of leafy greens

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

Nutrien (TSX:NTR) stock has been trading on a negative note for nearly two years now. After tanking by around 25% in 2023, NTR stock has lost 6% of its value so far in 2024 to currently trade at $70.04 per share with a market cap of $34.5 billion. While this negative movement in its shares might reflect a challenging environment for the global agriculture industry, Nutrien’s 4.2% annualized dividend yield still looks attractive for long-term, income-focused investors.

Created with Highcharts 11.4.3Nutrien PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

But is it the right time to buy Nutrien stock just for its dividend? In this article, I’ll try to answer that question by analyzing the company’s business fundamentals, dividend stability, and growth outlook. But first, let’s take a quick look at the key reasons why NTR stock has struggled over the past two years.

Nutrien stock

If you don’t know it already, Nutrien is one of the world’s largest providers of crop nutrients, including potash, nitrogen, and phosphate fertilizers, which are essential for global food production. In 2023, the company faced a tough market with declining fertilizer prices and lower profitability across its core segments. NTR’s total revenue for the year was US$29.1 billion, reflecting over 20% YoY (year over year) drop due to a broad decline in agricultural input prices and global economic uncertainties.

The negative impact was felt across Nutrien’s product lines last year, from potash to nitrogen and phosphate, with each segment reporting lower average selling prices and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). This could be the main reason why Nutrien stock has been under pressure.

Gradually improving fundamentals

Although it’s true that Nutrien’s fundamentals were heavily impacted in 2023, recent developments hint at a potential recovery. In the second quarter of 2024, the company reported a 10.9% YoY decline in its total revenue to US$10.2 billion as continued pressure on fertilizer prices weighed on sales.

However, its adjusted EBITDA for the quarter came in at US$2.2 billion, signalling resilience despite a challenging market. Nutrien attributed this to strong crop input demand, particularly in North America, alongside increased potash sales volumes and cost efficiencies across operations. Overall, the company’s continued focus on lowering operating costs helped it offset some of the pricing pressures and stabilize profitability.

In addition, Nutrien’s retail business stood out as another bright spot, with an increase in adjusted EBITDA to US$1.2 billion in the first half of 2024, largely supported by normalized product margins and strong grower demand. Interestingly, the retail segment continues to be a steady contributor to the company’s cash flow, which is important for sustaining its dividend payouts.

Is now the right time to buy Nutrien stock?

While Nutrien stock has struggled in the past two years, recent indicators suggest a potential turning point. The company’s proactive measures to streamline operations, especially in Brazil, and its focus on core strengths in potash and retail could help it benefit from a gradual recovery in the agriculture industry.

Even as Nutrien faces macroeconomic and regional challenges, its management’s focus on cost-control measures and cash flow generation provides a degree of confidence in its dividend’s stability. Considering that, the 4.2% dividend yield makes Nutrien an attractive stock for long-term, income-seeking investors.

Note that Nutrien will announce its third-quarter results after the market closing bell on November 6, which could provide further insights into its recovery trajectory.

Should you invest $1,000 in Aritzia right now?

Before you buy stock in Aritzia, 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 Aritzia 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 Jitendra Parashar 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 »