When a new investor thinks of stocks they should own for massive growth, tech stocks or artificial intelligence (AI) stocks might be the first areas they look at to find their picks. Given the rapid innovations in this space, it makes sense if you want to buy some of the top AI stocks for your self-directed portfolio. However, the world is much larger, and there are other spaces you can consider.
You might not think much of the agriculture sector, but seasoned investors know that the industry offers a certain sense of stability. Investing in a company making fertilizers does not have the same appeal as investing in high-growth tech giants already delivering substantial growth. The problem with the tech space is the high risk associated with its high growth potential.
No matter what happens to economies worldwide, people will need crops, and farmers will keep growing them to meet the ever-growing demand. Farmers need good fertilizers to grow crops and improve yields to match demand. Against that backdrop, investing in the world’s largest provider of fertilizer products should make sense, right? That’s where Nutrien (TSX:NTR) comes in.
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Nutrien stock
The Canadian giant in the global fertilizer market boasts a $36.57 billion market capitalization. It is the largest fertilizer producer by capacity, with an estimated 20% share of the potash market. It is also the U.S.’s biggest retailer of crop chemicals, seeds, and fertilizers. It has a physical presence in the country, sells agricultural products, and offers services directly to farmers.
Despite being such a big name in the industry, Nutrien stock has not had a good couple of years. As of this writing, Nutrien stock trades for a 47.71% discount from its all-time high in April 2022. The company’s recent performance has not been the best. 2024 saw the company deal with falling prices for nitrogen and potash — two of its most important offerings.
Nutrien took a big hit on profits, and it reflected in its fourth-quarter performance for fiscal 2024. The company posted a 45% decline in its net earnings compared to the same quarter in the previous year. In the same period, its revenue fell by 11%, and its adjusted earnings before interest, taxes, depreciation, and amortization declined by 12%. Nutrien also pays its investors their distributions at an annualized 4.24% dividend yield but with a high payout ratio.
These numbers should seem alarming to someone unaware of the industry’s workings. Investors who know the fertilizer industry’s cyclical nature have a better view of things. They understand that global supply chain problems, production issues, and demand dictate the rise and fall of commodity prices in this sector.
Foolish takeaway
Despite a tough 2024, Nutrien stock has had a strong start to 2025. Despite trading at nearly half its all-time high valuation, NTR stock is up by 13.24% year to date. This is a considerable performance during a time when most stocks are underperforming due to global trade tensions.
Plenty of investors hold the dividend stock due to its quarterly distributions. The recent increase in potash prices might make the dividends more secure. Besides rising commodity prices, improving supply chains and increasing food demand might drive further revenue growth for the company. If there was ever a good time to invest in its shares, it might just be right now.
