The year 2024 was challenging for the world for several reasons. Multiple sectors, including agriculture, faced various challenges, from supply chain issues to climate change. These challenges were also reflected in the performance of agricultural giants like Nutrien (TSX:NTR). The stock has dropped almost 16% since the beginning of the year, and the bear market phase is still persistent.
It’s essential to decide on the stock as you enter the new year. Whether you buy, hold, or sell your current stake in Nutrien can have significant implications for your portfolio.
The case for buying
One of the most significant cases for buying that can be made about Nutrien stock right now is its dividend yield. The stock may have dropped 16% this year, but its long-term slump has been going on for some time now, and it’s trading at a 54% discount from its five-year peak.
This has pushed its yield up to 4.7%, which is impressive. The company is on track to become an aristocrat, raising its dividends despite the stock going downwards.
An evergreen reason to buy Nutrien is its strong fundamentals. The company is the largest potash producer in the world, the third-largest nitrogen producer, and the largest agriculture retailer on the planet. Nutrien’s output is crucial to feeding a massive chunk of the global population.
Another reason to consider buying this stock is that many insiders are doing it as well. In the last three months, insiders have only bought Nutrien stock, and none have sold it. Also, the bulk of the company’s shares are held by institutions, and less than 30% are held by the public.
The case for holding
Considering how the stock has performed in the last few years, it’s challenging to make a strong case for holding, but if you are planning on selling it now to cut your losses, it might not be the wisest move. The stock may not be going up very soon, but the chances of it going down at an accelerated pace are also low.
If you have already held the stock for long, holding on to it till you can at least break even is a prudent approach. The financials are pretty healthy, and shifting market sentiment, along with a more nutritious and stable market, might push the stock up, eventually.
The case for selling
Selling might seem like a viable move, especially if your goal is to cut your losses and you consider its high valuation despite the deep discount, but selling now, this far into the game, might not be a great idea.
However, one scenario where selling might make sense is if the loss you take is not quite aggressive, and you can re-buy the stock at a discounted price and lock in the current high yield while you wait for the eventual recovery.
The overall returns from this strategy might yield better returns than simply holding on to the stocks, but only if the loss numbers and eventual recovery numbers reconcile the right way.
Foolish takeaway
Nutrien is one of the most prominent blue-chip stocks on the TSX and a giant in the global agricultural or, more accurately, fertilizer sector. It has been going down for some time now, and that has eroded a significant amount of trust associated with the stock. But its fundamentals are strong, and changing market sentiment can make it a winner in 2025 and in your portfolio.
