1 Undervalued Canadian Dividend Stock I’d Buy Now and Hold for Years

Grocery inflation keeps climbing, and Nutrien could be a practical way to invest in the companies that help grow the world’s food.

Key Points
  • Food prices are rising faster than overall inflation, keeping pressure on farmers to protect yields.
  • Nutrien is down from its 52-week high and pays a dividend, offering a potentially better entry point.
  • Potash demand and low costs support earnings, but fertilizer profits can swing sharply with the cycle.

Food inflation has a way of turning dinner into a financial planning exercise. That sounds dramatic until the grocery bill arrives and starts acting like it owns the place.

Statistics Canada said food purchased from stores rose 4.3% year over year in May 2026, outpacing headline inflation for the 16th straight month. Fresh fruit and vegetables helped drive the increase, which is exactly the kind of produce-section betrayal nobody asked for.

For investors, the lesson is simple. Food demand doesn’t disappear when the economy slows. Farmers still need to protect yields, replenish soil nutrients, and manage input costs. That makes agriculture one of the more useful places to look for long-term opportunities, especially when a strong business trades below recent highs.

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Source: Getty Images

NTR

That is why Nutrien (TSX: NTR) looks interesting today. Nutrien stock is one of the world’s largest providers of crop inputs and services. It produces potash, nitrogen, and phosphate, and it also runs a large agricultural retail network. Nutrien stock, in short, helps farmers grow more food. Not glamorous, perhaps, but neither is oxygen. Both remain rather useful.

Nutrien stock also looks cheaper than it did not long ago. In fact, at writing, Nutrien stock trades at about 18% below its 52-week high, even after a strong recovery from the low. Yet despite being down in share price, Nutrien stock doesn’t need to trade at bargain-bin levels to look attractive. It simply needs a reasonable entry point for investors who believe global food production will keep demanding crop nutrients.

Shares below recent highs, paired with a dividend yield around 3.4%, offer that setup. The dividend adds another reason to care. Nutrien declared a quarterly dividend of US$0.55 per share payable on July 17, 2026, to shareholders of record on June 30. Earlier in 2026, the company said that the payout equalled an annualized dividend of US$2.20 per share.

Looking ahead

The business case rests mostly on potash. Nutrien stock expects stronger potash demand in 2026 despite tough conditions for farmers. The company pointed to large crop production, a shorter U.S. fall application season, and the need to replenish soil nutrients.

Recent results support that view. In the first quarter of 2026, Nutrien stock’s potash-adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to US$578 million, helped by higher global benchmarks and record sales volumes. The company also kept controllable cash costs for potash product manufactured below US$60 per ton.

That is the number investors should remember. Potash gives Nutrien stock leverage to global crop nutrient demand, while low production costs can help protect margins when prices move around. Agriculture may be essential, but fertilizer earnings can still swing like a screen door in a windstorm.

Foolish takeaway

The risk is cyclicality. Nutrien stock depends on fertilizer prices, crop economics, natural gas costs, farmer demand, export markets, and global supply. If grain prices weaken or farmers delay purchases, earnings can fall quickly. The company is a dividend stock, not a guaranteed-paycheque machine with a maple leaf sticker.

Still, Nutrien stock looks like the kind of Canadian dividend stock long-term investors can buy when the market gets too moody about the cycle. It offers scale, a useful yield, exposure to global food production, and a share price still below recent highs.

Investors willing to hold through fertilizer’s ups and downs could find today’s price attractive. Food demand keeps showing up, season after season, and Nutrien stock remains one of Canada’s clearest ways to invest in the businesses that help feed it.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien. The Motley Fool has a disclosure policy.

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