Broadly speaking, commodities have had a very rough go in recent years, and investors have been punished for investing in this sector. Capital outflows from commodities have found their way into other sectors like technology. Few bullish catalyst have proliferated to support a mass migration of dollars back into the commodities sector.
That said, despite these headwinds, I do think Nutrien Ltd. (TSX:NTR)(NYSE:NTR) represents a strong value option for investors with a value-oriented mindset and a long-term investing time horizon.
Agricultural products like potash, nitrogen, potassium, and other fertilizers have not exhibited stable and/or increasing prices in recent years. This is largely due to a supply/demand imbalance which has reeked havoc on the sector. That said, Nutrien has done a good job of consolidating the sector.
The company has become a swing producer in the production of these products. This has allowed Nutrien some maneuverability with respect to margins and production/output.
Nutrien has a solid dividend, which I expect will be safe moving forward. Many of the short-term macroeconomic headwinds facing Nutrien are likely to be resolved in the next 12 to 24 months. Therefore, now a great time for an opportunistic investor seeking value to pick up shares of a great long-term buy and hold company such as Nutrien.
Invest wisely, my friends.
