Nutrien is less risky than it seems

Article Excerpt

A wide variety of random factors—from weather patterns and crop prices to politically motivated tariffs—affect fertilizer demand and prices. However, Nutrien’s unique business model combines the production of bulk fertilizer with the retail sale of agricultural products to farmers. The company’s retail stores, in fact, have higher profit margins than its fertilizer business. While the stock remains volatile, its long-term outlook is bright. Nutrien expects the world’s population will add another 2 billion people by 2050. That increases the need for more and better food, which will drive demand for fertilizers. The company is also developing exclusive crop protection products to help farmers improve their yields. NUTRIEN LTD. $64 is a buy. The company (Toronto symbol NTR; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 569.1 million; Market cap: $36.4 billion; Price-to-sales ratio: 1.9; Dividend yield: 3.6%; TSINetwork Rating: Average; www.nutrien.com) is the world’s largest producer of agricultural fertilizers: it ships about 25 million tonnes annually. Nutrien took its current form on January 1, 2018, through the…