This company has been on a downward slide for quite some time. I haven’t really been following it but earlier this year when it dipped to $38.00 I started debating entering a position. When you look at the chart, the price or total return you can see it’s had a negative return over the past 10 years and it’s trading at levels it was at back in 2014. With earnings set to be released at the end of the market Oct 1 2026 we will get a better idea of where the business is heading into the holiday season. They are trying to turn around and there has been no question that some of the decisions made have hurt the image and sales of the company but this is not a financially distressed company by any stretch. The company generated more than $46 billion in revenue, and as of May 31 it had roughly $9 billion in cash and short-term investments, compared with just under $8 billion of long-term debt. Even with the collapsing share price which has pushed the dividend yield above 4.5%. Nike has continued to increase the dividend for 24 consecutive years, and if they increase it again for a 25th consecutive year they could potentially get qualify for Dividend Aristocrat, The dividend is something that appears to be worth looking at closer, at first glance Nike paid out roughly 77% to 78% of earnings in dividends, so there isn't a huge cushion. Dig a bit deeper and of the $2.8 billion in operating cash flow they spent roughly $684 million on capital expenditures, which leaves about $2.184 billion of free cash flow but they paid out 2.4 billion in dividends so 110% of free cashflow. It’s worth watching at this point. I don't see any reason they would cut the dividend but it’s something to keep an eye on. The dividend is set to pay out on Oct 1 2026 so the next dividend would be sometime in January 2027 if you are looking at taking a position. Heading into earnings the option market is elevated with the expected move over 8% in either direction that would put the share price between $32 - $38 which is a pretty wide spread for a company like NKE Price targets might are all over the place not sure where the bottom will be for this company but at the current levels it is starting to look interesting. Anyone adding NKE to their dividend portfolio ?
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17 Comments
Jay @motivated_jay · 21d
For an active trader, today is a phenomenal day to trade Nike but people gotta do whats best for them.
Scott S@scottsinvesting · 21d
I love my dividend distributing stocks, but I never buy solely for the dividend. Never! As for the 4.6% yield, investors own capital is paying for this (me included)… With all that said, I don’t think the company is ‘dead’ as many do and there’s a good chance I add at some point.
Kyle Jones
@investwithkyle · 22d
The name Nike is so big world wide that it almost feels like it’s to big to fail. But for my I like to take the peter Lynch approach. When I look through my household I don’t own a single thing that is Nike. Even when I go shopping there is nothing Nike that I want to buy. I
Jason @retiredjay · 22d
Its certainly tempting at these prices, but I'm waiting for a few earning reports to see if there's any hope for a turnaround. Even if it runs up over the next 6 months, I'd rather be a little late than wrong
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