Nutrien Ltd's Dividend Analysis
Understanding the Dividend Performance and Sustainability of Nutrien Ltd
Nutrien Ltd (NYSE:NTR) recently announced a dividend of $0.54 per share, payable on 2024-04-11, with the ex-dividend date set for 2024-03-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Nutrien Ltd's dividend performance and assess its sustainability.
What Does Nutrien Ltd Do?
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Created in 2018 as a result of the merger between PotashCorp and Agrium, Nutrien is the world's largest fertilizer producer by capacity. Nutrien produces the three main crop nutrients--nitrogen, potash, and phosphate--although its main focus is potash, where it is the global leader in installed capacity with a roughly 20% market share. The company is also the largest agricultural retailer in the United States, selling fertilizers, crop chemicals, seeds, and services directly to farm customers through its brick-and-mortar stores and online platforms.
A Glimpse at Nutrien Ltd's Dividend History
Nutrien Ltd has maintained a consistent dividend payment record since 1990. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Nutrien Ltd's Dividend Yield and Growth
As of today, Nutrien Ltd currently has a 12-month trailing dividend yield of 4.07% and a 12-month forward dividend yield of 4.14%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Nutrien Ltd's annual dividend growth rate was 7.20%. Extended to a five-year horizon, this rate decreased to 4.90% per year. And over the past decade, Nutrien Ltd's annual dividends per share growth rate stands at -4.40%.
Based on Nutrien Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Nutrien Ltd stock as of today is approximately 5.17%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Nutrien Ltd's dividend payout ratio is 0.49.
Nutrien Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Nutrien Ltd's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of the past ten years, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Nutrien Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Nutrien Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Nutrien Ltd's revenue has increased by approximately 18.60% per year on average, a rate that outperforms approximately 60.09% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Nutrien Ltd's earnings increased by approximately 37.20% per year on average, a rate that outperforms approximately 65.69% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 30.30%, which outperforms approximately 70.97% of global competitors, indicates strong potential for continued financial health and dividend reliability.
Next Steps
In conclusion, Nutrien Ltd's consistent dividend payments, robust dividend growth rate, manageable payout ratio, strong profitability, and solid growth metrics paint a promising picture for value investors. With a forward-looking approach and an eye on industry trends, Nutrien Ltd appears poised to maintain its position as a reliable dividend payer in the agricultural sector. Investors seeking to expand their portfolio with high-dividend yield stocks may consider Nutrien Ltd as a potential candidate, keeping in mind the importance of thorough research and diversified investments. For further exploration of dividend opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
