Nutrien is down on a glum fertilizer market. It’s worth a look

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Nutrien,Stock,Period

Having fallen more than 50 per cent from a 2022 high, it is worth a look by investors who like out-of-favour stocks

stood apart from most other stocks during the recent bout of volatility: While the broader market slumped, then rebounded, the Canadian fertilizer giant continued to slide this week, touching a fresh three-and-a-half-year low on Thursday.The share price has fallen more than 50 per cent from its high in 2022, suggesting a steep discount from its recent heyday, even though the company is still generating huge amounts of cash. The dividend yield has risen to 4.

Mosaic Co. has fallen 35 per cent over the past year, trailing Nutrien by about five percentage points. For Nutrien, this hurts, given its exposure to the commodity. In the first half of this year, potash contributed US$1-billion in adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, or nearly a third of the company’s total.

“With the offshore contracts now in place, we do expect a global price floor to be established, and standard demand remains strong through the second half of the year,” Mark Thompson, Nutrien’s chief commercial officer – and newly appointed chief financial officer, effective Aug. 26 – said during a call with analysts.

“What we see is agronomic need to replenish potash levels globally after a few years of underapplication in key markets,” Mr. Thompson said.

 

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