Is NYSE:NKE a Good Fit for Dividend Investing?

Last update: Feb 26, 2024

NIKE INC -CL B (NYSE:NKE) is a hidden gem unveiled by our stock screening tool, featuring a promising dividend outlook alongside solid fundamentals. NYSE:NKE demonstrates decent financial health and profitability while ensuring a sustainable dividend. Let's break it down further.

Analyzing Dividend Metrics

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NYSE:NKE earns a 7 out of 10:

NKE's Dividend Yield is a higher than the industry average which is at 2.72.
The dividend of NKE is nicely growing with an annual growth rate of 11.10%!
NKE has been paying a dividend for at least 10 years, so it has a reliable track record.
NKE has not decreased their dividend for at least 10 years, which is a reliable track record.
NKE pays out 39.61% of its income as dividend. This is a sustainable payout ratio.
The dividend of NKE is growing, but earnings are growing more, so the dividend growth is sustainable.

Understanding NYSE:NKE's Health Score

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:NKE was assigned a score of 7 for health:

An Altman-Z score of 6.64 indicates that NKE is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.64, NKE belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
The Debt to FCF ratio of NKE is 1.42, which is an excellent value as it means it would take NKE, only 1.42 years of fcf income to pay off all of its debts.
NKE has a Debt to FCF ratio of 1.42. This is in the better half of the industry: NKE outperforms 72.00% of its industry peers.
Although NKE does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
A Current Ratio of 2.74 indicates that NKE has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.74, NKE is in the better half of the industry, outperforming 62.00% of the companies in the same industry.
Looking at the Quick ratio, with a value of 1.85, NKE is in the better half of the industry, outperforming 74.00% of the companies in the same industry.

What does the Profitability looks like for NYSE:NKE

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:NKE was assigned a score of 8 for profitability:

The Return On Assets of NKE (14.24%) is better than 94.00% of its industry peers.
NKE has a Return On Equity of 37.46%. This is amongst the best in the industry. NKE outperforms 96.00% of its industry peers.
NKE has a better Return On Invested Capital (18.55%) than 92.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NKE is significantly above the industry average of 10.03%.
The Profit Margin of NKE (10.28%) is better than 90.00% of its industry peers.
NKE's Profit Margin has improved in the last couple of years.
NKE has a better Operating Margin (11.76%) than 84.00% of its industry peers.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

Our latest full fundamental report of NKE contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.