Consumer Durables News

NIKE (NYSE:NKE) Is Paying Out A Larger Dividend Than Last Year


NIKE, Inc. (NYSE:NKE) will increase its dividend from last year’s comparable payment on the 28th of December to $0.34. Although the dividend is now higher, the yield is only 1.3%, which is below the industry average.

Check out the opportunities and risks within the US Luxury industry.

NIKE’s Earnings Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, NIKE was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 37.7% over the next year. If the dividend continues on this path, the payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.

NYSE:NKE Historic Dividend November 19th 2022

NIKE Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.36 in 2012 to the most recent total annual payment of $1.36. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. It is good to see that there has been strong dividend growth, and that there haven’t been any cuts for a long time.

The Dividend Has Growth Potential

Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. NIKE has impressed us by growing EPS at 8.6% per year over the past five years. NIKE definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like NIKE’s Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 32 analysts we track are forecasting for NIKE for free with public analyst estimates for the company. Is NIKE not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Valuation is complex, but we’re helping make it simple.

Find out whether NIKE is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.



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