Roughly half of global crop yields depend on fertilizer. Remove it, and the grocery aisle becomes considerably less exciting, considerably faster. Few products are more cyclical in price yet more stubbornly necessary.
The Food and Agriculture Organization says fertilizer contributes to approximately half of global crop yields, with demand expected to increase as the population approaches 10 billion. Farmers may delay purchases when crop prices weaken, but soil eventually wants its nutrients back. Apparently, even dirt keeps a balance sheet.
That recurring demand can support a decades-long investment, although the dividend still deserves inspection. Investors should compare the payout with earnings and cash flow, watch debt, and confirm management continues investing in the business. A quarterly dividend also isn’t inferior to a monthly one when those payments are being reinvested through several Canadian dividend stocks.
Commodity companies rarely travel in a straight line. Fertilizer prices rise, encourage additional supply, and eventually retreat before the cycle begins again. Those swings can produce attractive entry points when the long-term demand remains intact, which brings one Saskatchewan giant into focus.
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NTR
Nutrien (TSX: NTR) recently closed about 20% below its 52-week high of $116.95. Its dividend produces a yield near 3.3% at writing as well, while management increased the payment by 1% for 2026.
The company produces potash, nitrogen, and phosphate fertilizers while operating an enormous agricultural retail network across North America, South America, and Australia. This combination allows Nutrien stock to earn from both manufacturing crop nutrients and selling farmers fertilizer, seeds, crop-protection products, and services.
Its greatest advantage sits beneath Saskatchewan. Nutrien stock operates massive potash mines with long reserve lives, existing transportation connections, and production capacity that would take a new competitor years and billions of dollars to recreate. The world can develop new software rather quickly. Building a potash mine before lunch remains trickier.
Into earnings
First-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 30% to US$1.1 billion. Record potash sales volumes, higher fertilizer prices, and stronger retail results supported the increase, while management maintained its full-year guidance.
The dividend also consumed approximately half of fiscal 2025 adjusted earnings per share (EPS). That leaves some breathing room for weaker periods, mine investment, debt reduction, and share repurchases, although no commodity dividend should ever be treated as guaranteed.
Nutrien currently trades around 13.5 times trailing earnings. That isn’t bargain-bin territory, but it looks reasonable for a global fertilizer leader trading 20% below its recent peak. Investors considering buying stocks in Canada could build the position gradually instead of attempting to predict fertilizer’s next dramatic mood swing.
Foolish takeaway
Lower potash or nitrogen prices could reduce earnings quickly. Farmer affordability, weather, trade restrictions, energy costs, currency movements, and geopolitical developments can also send fertilizer markets wandering in unexpected directions. Nutrien stock’s phosphate and international retail operations have produced uneven returns as well. So, these are all points to consider before picking up the stock.
That said, those risks make Nutrien stock better suited to a diversified portfolio than an all-in wager. Still, its irreplaceable assets, improving results, and exposure to rising food demand could allow patient investors to reinvest a 3.3% yield while the next several decades provide the real harvest.
