Nutrien sags on weak fertiliser prices

Nutrien Corp. (TSX, NYSE: NTR)  is the world’s largest producer of agricultural fertilizers, including nitrogen and phosphates which it sells in bulk. At the retail level farmers buy its products through a network of more than 2,000 stores. 

Here’s my update from a recent issue of the Internet Wealth Builder investment newsletter:

Performance: The shares are down 14% year-to-date and 31% in the past 52 weeks.

Recent developments & discussion: Nutrien’s share price accelerated following the Russian invasion of the Ukraine. It received a big boost from sanctions applied to Russian fertilizer producers at the same time as a secular rebound increased demand. Nutrien planned to expand production as potash prices peaked at $1,200 a tonne last April.

Potash prices have since fallen by 70% to their current level and Nutrien has called off the expansions. Demand has weakened as China’s economy slumps and Russian producers have found ways to subvert sanctions, putting pressure on prices. The strike at the Port of Vancouver also hurt.

In consequence, Nutrien has reduced its 2023 adjusted net earnings per share guidance by roughly 30% to $4.72 a share, the second revision of the year.

Dividend:  Nutrien has raised its dividend in each of the last five years. The latest was the April payment, which rose 10% to $0.53 quarterly ($2.12 a year). It yields 3.4% at current prices. 

This article appeared in the Internet Wealth Builder on Sept.3, 2023.  For information on how to reprint this article please view this page.