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Thursday, October 2, 2014

Investment in Agrium Inc. (AGU.TO)

Today I started a hopefully long term position in Agrium, a global producer and marketer of nutrients for agricultural and industrial markets.

This goes to my TFSA account (similar to Roth IRA for US citizens), where I still have room for about 13 grand extra to invest tax free.

I purchased 15 shares at $95.77, as usual, when there is panic and fear in the environment: A gap down after management announced that Q3 profits would be lower than expected:

(Click on image to enlarge)

 I added an alert below $90 to enter the second half of this position.

At a P/E ratio of 15.46 it looks reasonable (the 5 year range of the PE ratio is 7.05 - 26.38) so it is more on the cheap side. I like their current dividend of 3.41%. I like the fact that they are increasing it. The Dividend 5 year growth rate has been 86.77%. The Payout ratio at 52.67 suggesting the current dividend is healthy with room for growth.

Last but not least, here's how a $10 000 investment in AGU would have performed ever since the company became public.
9.76% return per year is not bad. Better than market averages, but I certainly expect better than that going forward. We'll see.

With this purchase my projected yearly dividend income increases to $1379.34 Canadian Dollars plus $409.28 USD.

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