Nutrien Increases Quarterly Dividend and Announces Intent to Launch a New Share Repurchase Program

Rhea-AI Summary

Nutrien Ltd. (NTR) increases quarterly dividend by approximately two percent to US$0.54 per share, equating to an annualized dividend of US$2.16 per share. The Board also approves the purchase of up to five percent of Nutrien's common shares through a normal course issuer bid (NCIB). Dividend payments will be made in either Canadian dollars or US dollars based on shareholder residency and intermediary participation.

Insights

Financial Analyst

The announcement by Nutrien Ltd. of a quarterly dividend increase and the initiation of a normal course issuer bid (NCIB) to repurchase up to five percent of its outstanding shares is a strategic financial decision. The dividend increase, albeit modest at approximately two percent, signals confidence in the company's earnings stability and cash flow generation. This is often perceived positively by the market as it suggests a sustainable and potentially growing return on investment for shareholders.

The NCIB is an important event as it indicates that the company believes its shares are undervalued and it is using its capital to buy back shares, which can be accretive to earnings per share over the long term. This can also be a signal to the market that the company's management is focused on creating shareholder value. The repurchase program can potentially support the stock price by reducing the supply of shares available in the market, thus creating a positive impact on the share price, all else being equal.

Market Research Analyst

From a market perspective, the dividend policy and share repurchase program announced by Nutrien Ltd. may influence investor sentiment and the company's stock market performance. Dividend increases are often used by companies to attract income-focused investors, which can lead to a broadening of the investor base. Additionally, the share repurchase program could be seen as a strategic move to improve key financial ratios such as earnings per share (EPS) and return on equity (ROE), which are closely watched by analysts and investors.

It is also noteworthy that the dividend will be paid in local currency based on shareholder residence, with an option to change the payment currency. This flexibility caters to international investors and can affect the company's attractiveness to a global investor pool. The direct deposit option for dividend payments and currency election reflects Nutrien's commitment to accommodating shareholder preferences and streamlining the distribution process.

Tax Expert

For shareholders, the classification of dividends as eligible dividends under subsection 89(14) of the Income Tax Act (Canada) is significant. Eligible dividends are entitled to a more favorable tax treatment in the form of an enhanced dividend tax credit for Canadian residents. This tax efficiency is an important consideration for investors when assessing the after-tax return on their investment. Investors, particularly those in higher tax brackets, often favor companies that issue eligible dividends due to the tax advantages.

For U.S. and international shareholders, the tax implications of these dividends can be different and may involve foreign tax credits or withholding taxes, depending on the investor's country of residence and tax treaties in place. This adds a layer of complexity to the investment decision-making process, as the net benefit of the dividend can vary significantly based on the investor's tax situation.

SASKATOON, Saskatchewan--(BUSINESS WIRE)-- Nutrien Ltd. (TSX and NYSE: NTR) announced today that its Board of Directors declared a quarterly dividend of US$0.54 per share payable on April 11, 2024, to shareholders of record on March 28, 2024. This represents an approximately two percent increase from the prior dividend declared on November 1, 2023 and equates to an annualized dividend of US$2.16 per share.

The Board also approved the purchase of up to five percent of Nutrien’s issued and outstanding common shares over a twelve-month period through a normal course issuer bid (NCIB). Any purchases of common shares will be subject to acceptance by the Toronto Stock Exchange of Nutrien’s notice to commence a NCIB.

Registered shareholders who are residents of Canada as reflected in Nutrien's shareholders register, as well as beneficial holders (i.e., shareholders who hold their common shares through a broker or other intermediary) whose intermediary is a participant in CDS Clearing and Depositary Services Inc. or its nominee, CDS & Co., will receive their dividend in Canadian dollars, calculated based on the Bank of Canada daily average exchange rate on March 28, 2024. Registered shareholders resident outside of Canada as reflected in Nutrien's shareholders register, including the United States, as well as beneficial holders whose intermediary is a participant in The Depository Trust Company or its nominee, Cede & Co., will receive their dividend in US dollars. However, registered shareholders of Nutrien may elect to change the currency of their dividend payments to US dollars or Canadian dollars, as applicable. In addition, Nutrien offers registered shareholders direct deposit by electronic funds transfer for dividend payments.

Registered shareholders may elect to change the currency of their dividend and enroll for direct deposit by contacting, Nutrien’s registrar and transfer agent, Computershare Investor Services Inc., directly (1-888-847-9773 or service@computershare.com). Beneficial shareholders should contact their broker or other intermediary to determine the ability and necessary steps involved in an election to change the currency of their dividend payment. For further details, please visit www.nutrien.com/investors/shareholder-information/dividends.

All dividends paid by Nutrien are, pursuant to subsection 89(14) of the Income Tax Act (Canada), designated as eligible dividends.

About Nutrien

Nutrien is a leading provider of crop inputs and services, helping to safely and sustainably feed a growing world. We operate a world-class network of production, distribution and ag retail facilities that positions us to efficiently serve the needs of growers. We focus on creating long-term value by prioritizing investments that strengthen the advantages of our integrated business and by maintaining access to the resources and the relationships with stakeholders needed to achieve our goals.

Forward-Looking Statements

Certain statements in this news release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable securities laws including, but not limited to, statements with respect to, among other things, the payment of dividends by Nutrien, including the timing thereof, and Nutrien's intent to renew its NCIB and repurchase of its shares thereunder.

Such forward-looking statements involve certain known and unknown risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements of Nutrien to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including the receipt by Nutrien of acceptance of its proposed NCIB by the Toronto Stock Exchange; that Nutrien’s future results of operations will be consistent with management expectations in relation thereto; and the risks and uncertainties set forth in our filings with the Canadian securities commissions and the U.S. Securities and Exchange Commission.

All forward-looking statements are made as of the date of this news release. Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this press release as a result of new information or future events, except as may be required under applicable Canadian securities legislation or applicable U.S. federal securities laws. All of the forward-looking statements contained herein are qualified by these cautionary statements and by the assumptions that are stated or inherent in such forward-looking statements. Although we believe these assumptions are reasonable, undue reliance should not be placed on these assumptions and such forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221499255/en/

FOR FURTHER INFORMATION:

Investor Relations

Jeff Holzman

Vice President, Investor Relations

(306) 933-8545

Media Relations

Megan Fielding

Vice President, Brand & Culture Communications

(403) 797-3015

Contact us at: www.nutrien.com

Source: Nutrien Ltd.

FAQ

What is the new quarterly dividend amount declared by Nutrien Ltd. (NTR)?

Nutrien Ltd. (NTR) declared a quarterly dividend of US$0.54 per share.

What is the annualized dividend amount per share for Nutrien Ltd. (NTR)?

The annualized dividend for Nutrien Ltd. (NTR) is US$2.16 per share.

What percentage increase does the new dividend represent for Nutrien Ltd. (NTR)?

The new dividend represents an approximately two percent increase from the prior dividend.

What is the Board's approved action regarding Nutrien Ltd. (NTR) common shares?

The Board approved the purchase of up to five percent of Nutrien's common shares through a normal course issuer bid (NCIB).

How are dividend payments made by Nutrien Ltd. (NTR) determined in terms of currency?

Dividend payments by Nutrien Ltd. (NTR) are made in either Canadian dollars or US dollars based on shareholder residency and intermediary participation.