Beefing Up A Position @ 52 Week Lows
Beefing Up A Position @ 52 Week Lows
Hope your having a great January. Another pay period has passed and it’s time to put that money to work for us.
With the market still sitting around all time highs, it can get hard to find good stocks at great values. But they are out there. This month I was really debating starting a position in smart centers reit or adding to our stake in Bank of Montreal.
Smart Centers currently are down 10% from their 52 week high as this retail bug hits them as well. I think they are setup differently and most of their locations are anchored with a walmart. A solid tenant and one that draws a lot of people in, which also helps support the surrounding businesses. They have raised their dividend 6 years and have a 5 year dividend growth rate of 3%. Not huge, but they have alot of projects in the works and I think they will keep raising that dividend going forward.
BMO – Is one of our very first stocks we ever had. It has done well for us, but hasn’t went on the tear that national bank has. While bmo may not be most peoples favourite Canadian Bank it has the lowest exposure to the Canadian Housing market of the big 5, if I recall right. That’s definitely nice to see at the latter half of this economic cycle. All the Canadian Banks are at levels that I would say are good buys.
Personally I love to add to existing positions versus starting new ones. As the portfolio has grown the position in bmo as a percentage has dwindled right down. Currently it makes up only 1% of our dividend portfolio and pays its dividend in the our lowest income month. Being one of our smallest long term holdings, I wouldn’t mind increasing this position. Maybe in the coming months…… Although these Canadian banks do make up a size-able portion of our overall dividend portfolio at 13%
But then Nutrien Started Falling
I received a notification that nutrien is at 52 week lows. This is a stock I would love to grow again, and with all those fertilizers I think it will. I sold our previous position at 70 bucks a year and a half ago for the car.
I made the purchase on Friday but the stock keeps dropping lower and setting new 52 week lows. (well the whole market did on Monday) I’ll definitely admit that I can’t time the market. There’s lots of news out there with the Iran stuff and now the coronavirus. Will the market keep dropping? who knows? I’ll just stick with my plan of buying once or twice a month.
Who Is Nutrien
Nutrien Ltd is Canada-based crop nutrient producer and distributor of potash, nitrogen and phosphate products for agricultural, industrial and feed customers worldwide. The Company is focused on retail, potash, nitrogen and phosphate mining and processing operations. The Company’s retail operations serve growers in a number of countries across the United States, Canada, South Africa, Australia and South America. The Company operates six potash mines in Saskatchewan and has a mine in New Brunswick in care-and-maintenance mode. The Company operates integrated phosphate mining and processing facilities, as well as a number of smaller upgrading plants in the United States. (Source RBC Direct Investing)
2019 wasn’t the best year for Nutrien as weather and geopolitical issues affected the farmers. This has led to the price decline, but 2020 looks promising. The company has also been aggressively buying back shares the past couple years and in November got approval to increase the amount of shares it could buy back.
While the company isn’t technically a wide moat company, I think its setup pretty good. Obviously being a commodity business the price can fluctuate drastically. But got to love when they own both the mines and retail business.
They own 1700 retail stores in 7 different country’s. Nutrien is the worlds largest producer of Potash and 3rd largest Nitrogen Producer. There is the giant elephant in the room with the potential bhp Jansen potash project but bhp is still debating if they will even pursue it. (Although they have already put a lot of money into the mine) These lower potash prices currently may push the project off to the side.
I think there’s a lot to like in this space. The population keeps growing and farmland keeps getting taken over by city’s. Farmers are going to need to maximize the yield on their crops and fertilizer will be the big way to do it.
We also see this surge worldwide about Cannibis these days. Of course every grower wants to get the most bud they can out of their plants. While fertilizer isn’t everything it is a big part.
So we got a lot of stock buybacks, a 52 week low and a growing need for their products. What about that dividend?
The stock was formed in January 2018 through a merger between Agrium and Potash corp of Canada. So its a relatively new stock. The dividend started at .40 cents usd and now sits at .45 cents usd. Pretty good growth already but I’d love to see a longer history. Currently at 56.44 it offers a 4.04% starting dividend yield.
On Friday we added 22 more shares of the company to our portfolio at 58.31 per share. Bringing our total to 48 now. These 22 shares add 39.60 usd to our forward income. It also boosts our overall diversification as basic Materials is our lowest sector. I always love improving in this area as well.
I know there are a lot of people who don’t like the space or think its price will keep falling. That’s ok. I think long term its a great holding. Right now they have been closing mines and potash prices aren’t sky high but prices can change quickly. I don’t want to be a buyer when the hype is on. Id rather be a buyer when others are fearful and the stocks hitting 52 week lows.
I will continue building this position at least until I get that quarterly drip.
Long – Nutrien. Portfolio has Been updated.
What Are Your Thoughts? Have You been buying anything? or waiting to see what the market does?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.
I stick to my investment pattern irrespective of the market ups and downs as I’m a believer of time in the market is better than timing the market.
Plus my entire portfolio is made up of ETFs covering 90%+ of the global equity market so makes it easier to manage with consistent investing. I’ve stuck with the same pattern since I first started investing in Dec 2015.
I like the plan. Etfs are pretty simple. Investing basically comes down to habits. Its a habit now to always pay ourselves each week.
Its that simple!
I think you will do well in the long run. I’m not very familiar with the company. I heard about it from here and there and about the merger a few years ago. People needs to be fed and crops needs to be fertilized. For Nutrien being a miner and a retailer is a big YES. It’s like Suncor in the energy sector. When commodity prices are low, they can offset the shortfall with retail margins. Now you just need to grow your position for to activate the drips. Not sure if they offer drips.
Yeah they offer drips, going to take a couple more purchases but it will get there. That’s always the goal. I agree with your suncor comparison that exactly what I think of when I think of their operation.
I bought both NTR and MX and now both are in deep water. I am in for long term so not too much concern. However, as China being a major client of both, with the coronavirus situation in China, I kind of feel both will go even lower. My crystal ball always fails to tell the future though.
I don’t follow mx much but it was one I was considering in the past. Nutrien is a little concerning as it sets new lows, but since I’m still building a position with them its not all that bad.
I think this corona virus is a little overblown and creates some good opportunity’s in the market that really doesn’t affect those companies. (I keep comparing it to sars) Obviously I hope for everyone to stay healthy, but the flu generally kills more people. Well so far at least.
Right now Im debating more ibm, (after the new ceo and good quarter) 3m, disney or possibly caterpillar. See how things are mid next week.
What are you watching May?
Our family just picked up more shares of NTR this morning. We certainly don’t mind waiting for a rebound at near 52-week lows, and while we collect a decent dividend that is currently above 4%.
Best wishes and success on your personal journey! AFFJ
Well we certainly didnt time the purchase perfectly but like you said enjoy that dividend in the mean time. Gotta add more to make it a full position so I dint mind the dip =)
cheers all the best to you guys as well
Pumped to see what the dividend grows to be, LETS GO!!!!!
heres hoping that growth will continue, I guess time will tell.
Nice buy buddy.
This one has been showing up in some of my screens lately (now that I have some cash to put to work, i’ve been putting a new watchlist together)
So many good looking companies, but not as many trading at a discount as before:(
I might just sit on 40-50k cash for a while(month or two) and see if things dip or not.
hey Man Thanks!
Thats a stack of cash, Id put it to work slowly month by month. Who knows what will happen. If its for a rrsp 3m, disney and ibm would be my picks. Although ibm has been on a nice run since the ceo switch.
Look forward to seeing what you do