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Nike Inc's Dividend Analysis

Exploring the Robust Dividend Profile of Nike Inc (NYSE:NKE)

Nike Inc (NYSE:NKE) recently announced a dividend of $0.37 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-01. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Nike Inc's dividend performance and assess its sustainability.

What Does Nike Inc Do?

Nike is the largest athletic footwear and apparel brand in the world. Key categories include basketball, running, and football (soccer). Footwear generates about two thirds of its sales. Its brands include Nike, Jordan, and Converse (casual footwear). Nike sells products worldwide through company-owned stores, franchised stores, and third-party retailers. The firm also operates e-commerce platforms in more than 40 countries. Nearly all its production is outsourced to contract manufacturers in more than 30 countries. Nike was founded in 1964 and is based in Beaverton, Oregon.

Nike Inc's Dividend Analysis
Nike Inc's Dividend Analysis

A Glimpse at Nike Inc's Dividend History

Nike Inc has maintained a consistent dividend payment record since 1986, currently distributing dividends on a quarterly basis. The company has increased its dividend each year since 1997, earning the prestigious title of a dividend aristocrat. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Nike Inc's Dividend Analysis
Nike Inc's Dividend Analysis

Breaking Down Nike Inc's Dividend Yield and Growth

Nike Inc currently has a 12-month trailing dividend yield of 1.22% and a 12-month forward dividend yield of 1.32%, indicating an expectation of increased dividend payments over the next year. Over the past three years, Nike Inc's annual dividend growth rate was 11.50%, which decreased slightly to 11.30% per year over a five-year horizon. However, the past decade has seen an impressive annual dividends per share growth rate of 12.40%. This growth is reflected in the 5-year yield on cost for Nike Inc stock, which is approximately 2.08% as of today.

Nike Inc's Dividend Analysis
Nike Inc's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

The sustainability of Nike Inc's dividend is supported by a prudent payout ratio and robust profitability. With a dividend payout ratio of 0.42 as of 2023-08-31, Nike Inc retains a healthy portion of earnings for future growth and stability. The company's profitability rank of 9 out of 10, combined with a consistent record of positive net income over the past decade, underscores its strong financial position and earnings capability.

Growth Metrics: The Future Outlook

Nike Inc's growth rank of 9 out of 10 implies a promising growth trajectory when compared to competitors. Its revenue per share and 3-year revenue growth rate, averaging 11.60% per year, outperform approximately 74.68% of global competitors. Moreover, the company's 3-year EPS growth rate of 26.40% per year and a 5-year EBITDA growth rate of 22.50% outperform approximately 67.96% and 75.46% of global competitors, respectively. These growth metrics bode well for the continued sustainability of dividends.

Engaging Conclusion

With a solid track record of dividend growth, a responsible payout ratio, and robust profitability and growth metrics, Nike Inc stands out as a potentially appealing choice for value investors focused on dividend income. The company's financial health and strategic position in the athletic footwear and apparel market suggest a strong outlook for sustaining and potentially increasing its dividends. As investors consider the future of their portfolios, Nike Inc's dividend profile may offer a blend of stability and growth. For those seeking to discover more high-dividend yield opportunities, GuruFocus Premium provides a comprehensive High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.