The Canadian stock market has multiple international leaders, but a few are in a class of their own. Nutrien (TSX:NTR) is one such stock. It’s the largest agriculture retailer, the top potash producer, and the third largest nitrogen producer in the world.
The fertilizer company contributes to a significant segment of the global fertilizer supply directly and indirectly and has over 2,000 proprietary products on its portfolio. Nutrien is a solid business, but that hasn’t always translated into its being a good stock.
The case for buying
A strong case can be made to buy Nutrien, thanks primarily to the massive discount it’s trading at. The stock’s bear market phase started in April 2022, when it started slumping, and so far, it has fallen over 50% from its five-year peak. That 50% discount is a compelling reason in itself, but a relatively high P/E ratio of 32 undermines that.
But there are two consequences of this slump, the dividends and the recovery potential, that can’t be ignored. The yield has increased significantly thanks to the price going down (coupled with the payouts going up) and is quite attractive at 4.4%.
The company is also making a concerted effort to improve its cash flows (2026) by implementing various efficiency measures, including automating multiple production lines. A substantial boost to its financials might become the trigger that starts the stock’s bull run.
The case for selling or holding
Assuming that you bought the stock sometime after 2021, you will likely book a loss if you sell now. It might seem prudent to cut your losses, but if you have waited this far to unload this stock, it might be wiser to wait a while longer. Assuming the stock goes bullish, you may find a better time to sell in 2025.
If nothing else, you can cut your losses if the stock goes up a little instead of experiencing a proper bull market. So, holding on to the stock would be the smartest thing to do.
It’s a good idea to keep an eye on the stock’s financials. The company has taken several steps to improve operational efficiency, and once it starts reflecting in the financials, the stock may gain more positive traction. Then, you can sell to recoup your capital or keep holding to make a profit.
Foolish takeaway
Nutrien is among the promising 2025 blue-chip stocks in Canada, and the heavy discount it’s trading at is part of what makes it so promising. Assuming that the stock is ready for a rebound, buying now and locking in the current yield while holding the stock for capital appreciation might be the best move right now. However, the outlook may change as we progress through the year.
