If you’re an investor who loves finding large, high-quality companies that dominate their industry and make ideal long-term holdings, it’s hard to argue against Nutrien (TSX:NTR) being one of the best stocks on the TSX.
Nutrien is one of the most widely recognized names in Canadian agriculture, supplying essential crop inputs to farmers around the globe. Its massive footprint in the fertilizer and retail agriculture space makes it a go-to stock for many investors. However, just because it’s a high-quality business doesn’t necessarily mean it’s worth buying today.
It’s important to understand that even a strong, well-run company isn’t worth investing in if it’s overpriced in the current environment.
It’s essential to buy high-quality businesses but at prices that are fair or even attractive and then holding them for years through both strong markets and rough patches. That’s how you let compounding work in your favour. This is especially true for companies with steady demand, reliable cash flow, and the ability to generate consistent returns, like Nutrien.
Over the long term, businesses that can protect and grow their earnings, return capital to shareholders, and reinvest in future expansion are the ones that deliver the best results.
That’s why dividend growth stocks, such as Nutrien, have such an important place in a portfolio. They combine income with capital appreciation, which can be even more powerful for compounding when dividends are reinvested.
Nutrien has many of these qualities. It operates in a critical global industry, has the scale to maintain a dominant market position, and possesses the operational strength to navigate commodity price swings. However, to determine if it’s worth buying now for your portfolio, it’s essential to understand how the business operates and its current valuation.
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Nutrien is a leader in global agriculture with unmatched scale
One of the most significant reasons why Nutrien is such a high-quality business is that it’s the world’s largest provider of crop inputs, with operations that span the entire agricultural supply chain.
So, while it’s best known for producing potash, nitrogen, and phosphate fertilizers, it also operates an extensive agricultural retail network that sells seeds, crop protection products, and services directly to farmers.
This vertical integration is one of Nutrien’s biggest advantages. By controlling both production and distribution, Nutrien can capture more value from every stage of the process, improve margins, and better manage costs. This structure also allows the company to respond more effectively to changes in market conditions, such as shifts in crop prices or input costs.
Another major reason why Nutrien is worth considering for your portfolio is that it’s recession-resistant. Agriculture is one of the most essential industries in the world. Regardless of the economic cycle, farmers need fertilizer to maintain crop yields and meet the growing global demand for food.
Therefore, Nutrien’s size and global reach put it in a strong position to serve that demand, especially as the world’s population continues to grow.
So, although the business is cyclical, since it’s influenced by fertilizer prices and farmer spending, its integrated model and operational efficiency give it the tools to manage through downturns while still investing in long-term growth.
Should you buy the dividend growth stock today?
On Monday, Nutrien reported earnings for the second quarter of 2025, and in addition to beating the consensus estimate for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted earnings per share by an impressive 6.5% and 8.2%, respectively, the company also raised its full year guidance for its potash sales volume as well.
These impressive results have already prompted some analysts to raise their target prices for Nutrien. In fact, Nutrien’s average analyst target price of $89.65 is a roughly 15% premium to today’s trading price. That’s pretty compelling for a large, reliable business that also increases its dividend annually.
Therefore, with Nutrien offering a current yield of 3.8%, and trading at a forward enterprise value (EV)-to-EBITDA ratio of just 6.5 times, below its five-year average of 6.8 times, there’s no question it’s one of the best Canadian stocks to buy and hold for the long haul, especially at this valuation.
