Ticker: NTR (NYSE)
Market cap: 19.65 bil
Dividend yield: 5.31%
Nutrien, the world’s largest crop nutrient company, was formed in early 2018 as a result of the merger between Potash Corp. of Saskatchewan and Agrium.
The company is the largest agricultural retailer in North America and Australia. Its retail centres sell fertilisers, crop chemicals, and seeds directly to farmers. In the highly fragmented farm retail industry, Nutrien is pursuing an acquisition strategy to expand its retail store base, which should improve bargaining power with suppliers. The company benefits from selling proprietary and private-label products at its newly acquired stores. Nutrien is also investing in its online retail platform, which should generate sales growth as a greater proportion of farm retail sales move online.
In addition to its retail operations, Nutrien produces all three primary crop nutrients. With over 20% market share, Nutrien is the world’s largest producer of potash by capacity. It also has one of the lowest cost of production in the world. Meaning that during times of low potash prices (such as now) they are still able to generate profits whilst more expensive producers cut back or go bust.
CEO Chuck Magro is held in high regard and has been awarded an Exemplary stewardship rating by Morningstars analysts.
Nutrien is in good financial health. the company had around $8 billion of debt and $1.7 billion free cashflow.
I think that now is a great opportunity to get into this stock whilst the price is way below it’s intrinsic value. With an increasing population, a finite amount of arable land, a locust plague (yes really) about to kick off and of course that sweet dividend yield i would love for this stock to be added to Freetrades selection.
In the long term I believe that this stock will do very well. (Also for those that remember Sirius Minerals, Nutrien is a much more solid company.