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Nutrien sees gain on Ukraine uncertainty

Sees production increase if rival producers in Russia and Belarus face sanctions.

Nutrien Ltd. , the world’s largest producer of agricultural fertilizers, could substantially increase its production in coming years, if rival producers in Russia and Belarus face sanctions related to the Ukraine.

In an interview with Reuters, interim Nutrien CEO Ken Seitz said if sanctions were short-lived the company would not add capacity, but if it was a longer-term problem it would.

Here’s an update on Nutrien (TSX:NTR) which closed Friday Feb. 11 at C$97.21 and reports its latest quarter this week.

Nutrien’s fertilizers include nitrogen and phosphates, which it sells in bulk and at the retail level to farmers through a network of more than 2,000 stores.  

Nutrien’s shares hit a high of $99 at the end of December, ending the year with a 44% gain. They are up 2.2 % year-to-date

A few days into the New Year, Nutrien parted ways with its chief executive officer of only eight months, Mayo Schmidt, the second departure of a top executive in a year. No reason was given at the time, and none has emerged since.

Ken Seitz, head of the company’s potash division replaced Mr. Schmidt on an interim basis. Mr. Seitz joined Nutrien in 2019 and is the former CEO of Canpotex, a major potash supplier.

While the news raised questions, Nutrien’s outlook is bright, and Mr. Seitz is a seasoned executive. In the spring, Nutrien said it was seeing the start of a multiyear cyclical recovery, a trend that is unchanged. 

On Feb. 1, when the Reuters story was published its shares rose 4% on the day. They are up 12% since then.

Nutrien raised its quarterly dividend for the fourth time in three years to $0.46 with the September payment. It yields 2.46% at current prices.  

This is an edited version of article that appeared in the Internet Wealth Builder on Feb. 6, 2022. 

Adam Mayers writes about investing and personal finance. He is a contributor to the Globe & Mail’s Globe Advisor and a contributing editor to Gordon Pape's Internet Wealth Builder newsletter. Adam was Business Editor and investment columnist at The Toronto Star and is the author of six books.

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