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Summary
- According to the Government of Canada, market demand for agricultural commodities will remain strong this year.
- Nutrien claims to be the world's largest fertilizer producer by capacity and it offers a 2.03 per cent return on equity (ROE).
- The Toronto Stock Exchange (TSX) provides many options for investors to invest in the agri sector. Read this article to find out more.
The agricultural industry in Canada got affected due to the coronavirus pandemic in 2020. However, this sector is estimated to witness a strong financial performance this year. According to the Government of Canada, market demand for agricultural commodities will remain strong and the Net Cash Income is forecast to grow at about seven per cent to C$ 17.6 billion.
The Toronto Stock Exchange (TSX) provides many options for investors to invest in this sector. In this article, we'll explore the recent financial and stock performances of Nutrien Ltd. (TSX:NTR) and Village Farms International Inc. (TSX:VFF) to find out whether you should invest your money in these two stocks or not:
Nutrien Ltd. (TSX:NTR)
Nutrien claims to be the world's largest fertilizer producer by capacity and it offers a 2.03 per cent return on equity (ROE) and its market cap is C$ 41 billion, as per TMX. The company distributes a quarterly dividend of US$ 0.46, which grew at the rate of 12.4 per cent in three years.
Nutrien Ltd. (TSX:NTR) released its first-quarter earnings report on Tuesday, May 4, beating the analysts’ estimates and posted adjusted net earnings of US$ 0.29. In Q1 FY21, the company's free cash flow was US$ 476 million, more than double of what it generated in the same quarter of the previous year.
One-year chart of stock performance of Nutrien (Source: EODHD/Others/Thomson Reuters)
On average, over 1.6 million NTR shares traded on the TSX in the past 30 days and its stock grew by five per cent in a month. The shares closed at C$ 71.85 apiece on May 4, down by a little more than three per cent from its 52-week high of C$ 74.34 (March 18, 2021). NTR stock's year-to-date (YTD) stands at 17 per cent and it ballooned about 44 per cent in one year.
Village Farms International Inc. (TSX:VFF)
The provider of agricultural greenhouse facilities will release its first-quarter fiscal 2021 results soon. In April, equity researchers at Raymond James increased their FY21 earnings estimates for Village Farms International Inc. (TSX:VFF) and said the company will post earnings of US$ 0.14 per share for the year.
One-year chart of stock performance of VFF (Source: EODHD/Others/Thomson Reuters)
The stock’s six-month growth is 87 per cent and it skyrocketed by 173 per cent in a year. The scrips closed at C$ 12.98 apiece on May 4, available at almost half the price of its 52-week high of C$ 25.78 on February 10, 2021.
In Q4 2020 ended December 31, 2020, the company's sales were up by 43 per cent year-over-year (YoY) to US$ 47.4 million. VFF achieved a net income of US$ 7 million in comparison with the net loss of US$ 7.2 million in Q4 2019.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
