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 Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, 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 Canadian Natural Resources 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

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »

Asset Management
Dividend Stocks

12% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Stocks with high-dividend yields carry risks. But they could be a good long-term investment. Here is a 12% dividend stock…

Read more »

Canadian flag
Dividend Stocks

How I’d Build a Foundation of Canadian Value Stocks in My Investment Strategy

Canadian investors can explore iShares Canadian Value Index ETF for value stock ideas to build a foundation for their diversified…

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Transform a $30,000 TFSA Into a Cash-Flow Machine

Here's why TFSA investors should consider owning dividend stocks such as Mullen Group in 2025.

Read more »