Nutrien Ltd. (NYSE: NTR)

Sector: Basic Materials Industry: Agricultural Inputs CIK: 0001725964
Market Cap 33.97 Bn
P/B 1.35
P/E 18.78
P/S 1.28
ROIC (Qtr) 6.08
Div Yield % 2.33
Rev 1y % (Qtr) 12.32
Total Debt (Qtr) 14.18 Bn
Debt/Equity (Qtr) 0.56
Add ratio to table...

About

Investment thesis

Bull case

  • Operating cash flow of 4.15B provides exceptional 159.73x coverage of minority interest expenses 26M, showing strong core operations.
  • Operating cash flow of 4.15B provides strong 29.88x coverage of stock compensation 139M, indicating sustainable incentive practices.
  • Strong tangible asset base of 38B provides 2.68x coverage of total debt 14.18B, indicating robust asset backing and low credit risk.
  • Retained earnings of 11.84B provide full 1.10x coverage of long-term debt 10.81B, indicating strong internal capital position.
  • Robust tangible asset base of 38B provides 9.05x coverage of working capital 4.20B, indicating strong operational backing.

Bear case

  • Operating cash flow of 4.15B barely covers its investment activities of (1.64B), with a coverage ratio of -2.53, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 624M against inventory of 5.28B, the 0.12 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 4.15B provides thin coverage of dividend payments of (1.06B) with a -3.91 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 624M provide limited coverage of acquisition spending of (27M), which is -23.11x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 3.19B show weak coverage of depreciation charges of 2.39B, with a 1.33 ratio indicating high capital intensity and potential reinvestment needs.

Breakdown of Revenue (2023)

Breakdown of Revenue (2023)

Peer comparison

Companies in the Agricultural Inputs
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CTVA Corteva, Inc. 51.66 Bn 47.22 2.97 2.58 Bn
2 NTR Nutrien Ltd. 33.97 Bn 18.78 1.28 14.18 Bn
3 CF CF Industries Holdings, Inc. 24.01 Bn 17.27 5.06 3.40 Bn
4 MOS Mosaic Co 11.47 Bn 12.98 1.20 4.57 Bn
5 ICL ICL Group Ltd. 7.35 Bn 19.93 1.04 2.68 Bn
6 SMG Scotts Miracle-Gro Co 4.04 Bn 45.09 1.21 2.53 Bn
7 FMC Fmc Corp 1.81 Bn 1.37 0.40 4.58 Bn
8 UAN Cvr Partners, Lp 1.13 Bn 13.61 1.94 0.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 0.81
EV to Cash from Ops. EV/CFO 11.13 10.02
EV to Debt EV to Debt 3.26 10.62
EV to EBIT EV/EBIT 14.51 46.09
EV to EBITDA EV/EBITDA 8.22 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF 21.07 9.01
EV to Market Cap EV to Market Cap 1.36 1.48
EV to Revenue EV/Rev 1.74 1.04
Price to Book Value [P/B] P/B 1.35 0.69
Price to Earnings [P/E] P/E 18.78 13.22
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.70 1.10
Dividend Payout Ratio % Div Payout % (Qtr) 43.80 28.62
Dividend per Basic Share Div per Share (Qtr) 1.63 1.49
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 36.08 2.06
Interest Coverage Int. cover (Qtr) 4.56 3.21
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 6.58 10,378.95
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.00 20.72
Dividend Growth (1y) % Div 1y % (Qtr) -24.19 -0.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 81.05 -98.96
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 27.48 -212.56
EBIT Growth (1y) % EBIT 1y % (Qtr) 84.48 -25.56
EBT Growth (1y) % EBT 1y % (Qtr) 151.47 257.67
EPS Growth (1y) % EPS 1y % (Qtr) 149.66 -169.70
FCF Growth (1y) % FCF 1y % (Qtr) -10.99 -105.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.19 14.76
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.00
Cash Ratio Cash Ratio (Qtr) 0.06 0.66
Current Ratio Curr Ratio (Qtr) 1.41 1.99
Debt to Equity Ratio Debt/Equity (Qtr) 0.56 0.09
Interest Cover Ratio Int Coverage (Qtr) 4.56 3.21
Times Interest Earned Times Interest Earned (Qtr) 4.56 3.21
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 21.00 -162.19
EBIT Margin % EBIT Margin % (Qtr) 11.97 -175.66
EBT Margin % EBT Margin % (Qtr) 9.34 -244.07
Gross Margin % Gross Margin % (Qtr) 30.20 32.49
Net Profit Margin % Net Margin % (Qtr) 6.80 -252.26