Should You Be Adding Nutrien (TSE:NTR) To Your Watchlist Today?

Simply Wall St

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn’t your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Nutrien (TSE:NTR). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

View our latest analysis for Nutrien

Nutrien’s Improving Profits

Over the last three years, Nutrien has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn’t particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, Nutrien’s EPS grew from US$5.53 to US$15.36, over the previous 12 months. It’s a rarity to see 177% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. Nutrien shareholders can take confidence from the fact that EBIT margins are up from 18% to 27%, and revenue is growing. That’s great to see, on both counts.

The chart below shows how the company’s bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Should You Be Adding Nutrien (TSE:NTR) To Your Watchlist Today? (yahoo.com)