This fertilizer company beat earnings estimates by double last quarter, posting EPS of $0.39. The shares have a current dividend yield of 3.33%, paid quarterly.
Nutrien Ltd. (NTR, NTR.TO)
From Internet Wealth Builder
Nutrien is the world’s largest producer of agricultural fertilizers. This includes nitrogen and phosphates which it sells in bulk and at the retail level to farmers.
The Saskatchewan-based company was formed in 2018 from the merger of Agrium Corp. and Potash Corp. Potash was a globally dominant fertilizer producer, while Agrium offered a retail network of about 2,000 stores. This network dominates in North America and Australia and is expanding in Latin America. The merger provided a way to compete with large producers in Belarus and Russia.
Nutrien’s shares are up 32% in the last 12 months and 9% year-to-date.
In its latest quarter, reported in mid-February, sales of $4.05 billion were 17% higher than a year earlier. Net earnings of $316 million or $0.55 cents per share compared with a loss of $48 million (-$0.08 per share) in the prior year. Note that the company reports in U.S. dollars.
In a conference call, CEO Chuck Magro (who announced his retirement last week) said Nutrien expects an excellent spring planting season and strong company-wide growth as it enjoys a continuing recovery. It expects higher fertilizer prices and volumes this year with demand rising in China.
“We could be seeing the start of a multiyear cyclical recovery in agriculture and crop inputs,” he told analysts.
In a recent development, Nutrien settled a dispute with the Egyptian government over Nutrien’s 26% stake in a state-owned fertilizer company. Nutrien sued over the cancellation of a marketing agreement. It has dropped its suit and sold its stake to the Egyptian government for $540 million.
In February, Nutrien raised its quarterly dividend for the third time in three years to $0.46 per share (about C$0.58), up a penny. It also plans to buy back up to 5% of its shares over the next year.
Action now: Nutrien is a buy.
Adam Mayers, Gordon Pape’s Internet Wealth Builder, buildingwealth.ca, 1-888-287-8229, April 26, 2021