Another Reason Nutrien Stock Looks Solid Right Now

Here’s why long-term investors may want to consider Nutrien (TSX:NTR)(NYSE:NTR) stock in this current environment today.

| More on:
analyze data

Image source: Getty Images

When it comes to stocks generating market-beating returns, Nutrien (TSX:NTR)(NYSE:NTR) has certainly attracted a lot of interest from investors. Indeed, the Nutrien stock has surged nearly 40% year to date. This speaks to the value investors have found in owning this fertilizer player

Indeed, I believe Nutrien stock is one of the best commodities-oriented options on the TSX right now. Without a doubt, the current economic environment is favourable for such stocks. Considering this surge in share price, there many be some investors looking to take profits. However, there are also a number of reasons to stay invested or potentially add at these levels.

Let’s dive into the bull case on Nutrient stock.

Current fertilizer prices favour Nutrien stock

Over the short term, I think there’s a lot to like about how Nutrien is positioned. This fertilizer producer focuses on providing the market with potash, nitrogen, phosphorus, and other minerals used as agricultural fertilizers. These happen to be in high demand, as population growth and supply chain challenges make for a supply-and-demand outlook that finally favours commodities players.

Crop nutrients have been rising in value partly due to ricing natural gas prices. Russia and China (key markets in this regard) have limited nutrient exports, so domestic suppliers such as Nutrien are filling the gap.

Additionally, the U.S. is one of the leading countries that import fertilizer products. Approximately 40% of the overall ammonium nitrate and 20% of its total urea come from Russia. With Nutrien’s exposure to the U.S. market and global commodity prices, this company appears to be in a favourable position.

Nutrien is raising its production in this market and is likely to gain market share right now. For those with a longer-term outlook, the potential for Nutrien to dominate more of the global potash trade is very bullish. Should continued consolidation take place, Nutrien could be in a very strong position to corner the market in certain geographic regions.

Bottom line

Indeed, there appears to be a lot of optimism surrounding Nutrien stock right now. Taking everything into consideration, Nutrien is a company that looks like it can deliver excellent results in the forthcoming quarters. 

Nutrien has shown some impressive results in recent quarters, driven by higher fertilizer prices. The company’s valuation has reflected this. However, I think a tighter longer-term supply/demand in the fertilizer space is likely to take hold. Accordingly, Nutrien stock is one of my top picks for investors looking for commodities-related exposure right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd.

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

A meter measures energy use.
Dividend Stocks

Is Fortis Stock a Buy, Sell, or Hold for 2025?

Fortis has increased its dividend annually for the past five decades.

Read more »

analyze data
Dividend Stocks

3 Dividend Stocks That Are Screaming Buys in November

Here are three top dividend stocks long-term investors won't want to ignore during this part of the market cycle.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Generate $175/Month in Passive Income With a $30,000 Investment

Dividend aristocrats offer reliability, and many of them also offer generous yields. With sizable enough discounts, these yields can become…

Read more »

dividends can compound over time
Dividend Stocks

Best Dividend Stocks to Buy Now for Canadian Investors

These three stocks would be excellent additions to your portfolios, given their solid underlying businesses, consistent dividend growth, and healthy…

Read more »

data analyze research
Dividend Stocks

3 Undervalued Stocks to Watch in November

Not all undervalued and discounted stocks are destined or poised to make a comeback soon, and a protracted timeline can…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

The Perfect TFSA Stocks for Long-Term Growth

Two industry heavyweights are perfect stock holdings in a TFSA for long-term money growth.

Read more »