Nutrien LTD (NYSE:NTR) ranks 6th in our list of the Best Canadian Dividend Stocks for Income Investors.
Click to see the full list of 8 Best Canadian Dividend Stocks for Income Investors.
Before analyzing Nutrien, let’s analyze the state of Canadian dividend investing strategies and their returns so far this year.
Canadian dividend stocks have always lured income investors, thanks to their attractive yields and stability. As inflation in North America remains sticky and rate cuts farther than expected, dividend stocks are continuing to gain market attention. In the first quarter of 2024, S&P/TSX Composite Total Return Index returned 6.6%, while the index’s return last year stood at 11.8%. Canadian stocks have been performing well this year. A detailed report by ClearBridge Investments said that nine out of 11 sectors in Canada posted positive returns in the March quarter, with healthcare, energy and industrials leading the pack.
The report said that the AI-led rally that pushed stocks higher in later 2023 has shown its effects in 2024 as well. ClearBridge believes investors appear to be “less mindful” of downside risks in the market. The report said that some equity valuations are depicting “uncomfortably high” expectations. ClearBridge also said its Dividend Strategy underperformed its S&P/TSX Composite Total Return Index benchmark during the first quarter. The strategy was invested in nine sectors in the period, out of which six sectors generated gains. Energy, Financials and Industrials were the biggest contributors, while the Communication Services took a toll on overall returns.
While ClearBridge’s dividend strategy underperformed its benchmark index, there are several other Canadian dividend portfolios that have been posting upbeat returns. For example, The Morningstar Canada Income Pick List Strategy, which consists of high-yield Canadian dividend stocks with strong analyst ratings, outperformed the S&P/TSX 60 Index during the month of April, albeit with a thin margin. The strategy posted a return of -2.1% in April, compared to the benchmark’s return of -2.2%.
Lorne Steinberg, President, Lorne Steinberg Wealth Management, during an interview with Bloomberg, recently recommended investors to pile into high-yield Canadian dividend bank stocks. The analyst said that over the past several months US banks and broader market ETFs have seen a huge inflow of funds, and Canadian banks have underperformed their US peers. However, Steinberg believes the market has “ignored” Canadian banks despite the fact that their performance is almost similar to their US peers, barring a few exceptions like JPMorgan. The analyst also said that Canada is still a “growth country” where the citizens are getting wealthier, which could bode well for Canadian bank stocks, which he believes would keep seeing earnings growth over the next few years.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
Nutrien LTD (NYSE:NTR)
Number of Hedge Fund Investors: 33
Agricultural products, of crop inputs and services company Nutrien LTD (NYSE:NTR) is one of the most popular Canadian dividend stocks to buy according to hedge fund investors. A total of 33 hedge funds tracked by Insider Monkey reported having stakes in Nutrien LTD (NYSE:NTR) as of the end of the March quarter this year. Over the past three years, Nutrien LTD’s (NYSE:NTR) annual dividend growth rate is 7.20%. The stock has a dividend yield of about 3.5% as of May 24. Berenberg last month upgraded Nutrien LTD (NYSE:NTR) shares to Buy from Hold. Berenberg analysts believe the stock is poised to grow amid sales volume growth expectations.
Nutrien talked about guidance during Q1 earnings call:
“We have maintained our 2024 retail earnings and fertilizer sales volume ranges as market conditions and operational performance have progressed in line with our previous expectations. For retail, our full year adjusted EBITDA guidance is unchanged at $1.65 billion to $1.85 billion. The midpoint of this range represents an increase of approximately $300 million compared to 2023. Our outlook includes an expectation for increased crop nutrients volumes and margins for our North American retail business in the first half and improved crop input margins in Brazil during the second half of the year. In April, we initiated a process to divest our retail assets in Argentina, Chile and Uruguay.
This region accounts for approximately 3% of our global retail sales and around 2% of adjusted EBITDA. The decision reflects our focus on core geographies and actions that enhance the quality of our earnings and cash flow. Our 2024 retail guidance reflects a full year of earnings from these assets as we currently do not have a time line for completion of the divestiture. We maintained our annual potash sales volume guidance range of 13 million to 13.8 million tonnes and expect a more even split between first and second half compared to 2023.”
Click to see the full Q1’2024 earnings call transcript here.
During the first quarter of 2024, Nutrien LTD (NYSE:NTR) earned $0.46 per share, beating estimates by $0.08. Revenue fell 11.8% year over year to $5.39 billion, surpassing estimates by $210 million.
Nutrien LTD (NYSE:NTR) ranks 6th on our list of the 8 Best Canadian Dividend Stocks For Income Investors.
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Disclosure: None. This article is originally published at Insider Monkey.
