NIKE INC -CL B (NKE) Stock Fundamental Analysis
NYSE:NKE - New York Stock Exchange, Inc. - US6541061031 - Common Stock - Currency: USD
Taking everything into account, NKE scores 6 out of 10 in our fundamental rating. NKE was compared to 49 industry peers in the Textiles, Apparel & Luxury Goods industry. NKE gets an excellent profitability rating and is at the same time showing great financial health properties. NKE is quite expensive at the moment. It does show a decent growth rate. Finally NKE also has an excellent dividend rating. With these ratings, NKE could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year NKE was profitable.
NKE had a positive operating cash flow in the past year.
Each year in the past 5 years NKE has been profitable.
NKE had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of NKE (11.93%) is better than 89.80% of its industry peers.
NKE has a Return On Equity of 32.18%. This is amongst the best in the industry. NKE outperforms 87.76% of its industry peers.
NKE has a better Return On Invested Capital (16.77%) than 83.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.45%.
The 3 year average ROIC (16.64%) for NKE is below the current ROIC(16.77%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.93% | ||
| ROE | 32.18% | ||
| ROIC | 16.77% |
ROA(3y)12.42%
ROA(5y)13.49%
ROE(3y)33.36%
ROE(5y)36.9%
ROIC(3y)16.64%
ROIC(5y)18.07%
1.3 Margins
The Profit Margin of NKE (9.43%) is better than 81.63% of its industry peers.
NKE's Profit Margin has been stable in the last couple of years.
NKE has a better Operating Margin (11.10%) than 75.51% of its industry peers.
NKE's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 43.82%, NKE is doing worse than 63.27% of the companies in the same industry.
In the last couple of years the Gross Margin of NKE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.1% | ||
| PM (TTM) | 9.43% | ||
| GM | 43.82% |
OM growth 3Y-17.6%
OM growth 5Y-0.82%
PM growth 3Y-18.72%
PM growth 5Y0.48%
GM growth 3Y-2.41%
GM growth 5Y-0.32%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NKE is creating value.
The number of shares outstanding for NKE has been reduced compared to 1 year ago.
The number of shares outstanding for NKE has been reduced compared to 5 years ago.
The debt/assets ratio for NKE has been reduced compared to a year ago.
2.2 Solvency
NKE has an Altman-Z score of 4.93. This indicates that NKE is financially healthy and has little risk of bankruptcy at the moment.
NKE has a Altman-Z score of 4.93. This is amongst the best in the industry. NKE outperforms 83.67% of its industry peers.
The Debt to FCF ratio of NKE is 1.69, which is an excellent value as it means it would take NKE, only 1.69 years of fcf income to pay off all of its debts.
NKE has a better Debt to FCF ratio (1.69) than 77.55% of its industry peers.
A Debt/Equity ratio of 0.57 indicates that NKE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.57, NKE is doing worse than 61.22% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for NKE, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.69 | ||
| Altman-Z | 4.93 |
ROIC/WACC1.89
WACC8.86%
2.3 Liquidity
NKE has a Current Ratio of 2.19. This indicates that NKE is financially healthy and has no problem in meeting its short term obligations.
NKE has a Current ratio of 2.19. This is comparable to the rest of the industry: NKE outperforms 57.14% of its industry peers.
NKE has a Quick Ratio of 1.52. This is a normal value and indicates that NKE is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of NKE (1.52) is better than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.52 |
3. Growth
3.1 Past
NKE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -42.40%.
Measured over the past 5 years, NKE shows a small growth in Earnings Per Share. The EPS has been growing by 3.37% on average per year.
The Revenue has decreased by -9.84% in the past year.
Measured over the past years, NKE shows a small growth in Revenue. The Revenue has been growing by 4.36% on average per year.
EPS 1Y (TTM)-42.4%
EPS 3Y-16.87%
EPS 5Y3.37%
EPS Q2Q%-86.14%
Revenue 1Y (TTM)-9.84%
Revenue growth 3Y-0.29%
Revenue growth 5Y4.36%
Sales Q2Q%-11.97%
3.2 Future
NKE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.35% yearly.
The Revenue is expected to grow by 4.30% on average over the next years.
EPS Next Y-9.92%
EPS Next 2Y9.9%
EPS Next 3Y21.23%
EPS Next 5Y19.35%
Revenue Next Year-1.42%
Revenue Next 2Y2.08%
Revenue Next 3Y3.85%
Revenue Next 5Y4.3%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 33.62, NKE can be considered very expensive at the moment.
NKE's Price/Earnings ratio is a bit more expensive when compared to the industry. NKE is more expensive than 61.22% of the companies in the same industry.
When comparing the Price/Earnings ratio of NKE to the average of the S&P500 Index (27.30), we can say NKE is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 37.33, the valuation of NKE can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NKE indicates a slightly more expensive valuation: NKE is more expensive than 73.47% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of NKE to the average of the S&P500 Index (21.76), we can say NKE is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.62 | ||
| Fwd PE | 37.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NKE is valued a bit more expensive than 65.31% of the companies in the same industry.
NKE's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.18 | ||
| EV/EBITDA | 17.47 |
4.3 Compensation for Growth
NKE has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NKE's earnings are expected to grow with 21.23% in the coming years.
PEG (NY)N/A
PEG (5Y)9.97
EPS Next 2Y9.9%
EPS Next 3Y21.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.09%, NKE has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.62, NKE pays a bit more dividend than its industry peers.
NKE's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.09% |
5.2 History
On average, the dividend of NKE grows each year by 11.20%, which is quite nice.
NKE has paid a dividend for at least 10 years, which is a reliable track record.
NKE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.2%
Div Incr Years23
Div Non Decr Years34
5.3 Sustainability
50.33% of the earnings are spent on dividend by NKE. This is a bit on the high side, but may be sustainable.
The dividend of NKE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP50.33%
EPS Next 2Y9.9%
EPS Next 3Y21.23%
72.63
-1.99 (-2.67%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryTextiles, Apparel & Luxury Goods
Earnings (Last)
Earnings (Next)
Inst Owners86.22%
Inst Owner Change0.01%
Ins Owners0.94%
Ins Owner Change-0.81%
Market Cap107.20B
Analysts71.82
Price Target73.64 (1.39%)
Short Float %3.13%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.09% |
Yearly Dividend1.43
Dividend Growth(5Y)11.2%
DP50.33%
Div Incr Years23
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)52.71%
Min EPS beat(2)21.88%
Max EPS beat(2)83.55%
EPS beat(4)4
Avg EPS beat(4)39.67%
Min EPS beat(4)19.98%
Max EPS beat(4)83.55%
EPS beat(8)7
Avg EPS beat(8)25.67%
EPS beat(12)11
Avg EPS beat(12)24.12%
EPS beat(16)15
Avg EPS beat(16)26.57%
Revenue beat(2)2
Avg Revenue beat(2)1.12%
Min Revenue beat(2)0.86%
Max Revenue beat(2)1.38%
Revenue beat(4)2
Avg Revenue beat(4)-0.51%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)1.38%
Revenue beat(8)4
Avg Revenue beat(8)-0.44%
Revenue beat(12)8
Avg Revenue beat(12)0.91%
Revenue beat(16)10
Avg Revenue beat(16)1.3%
PT rev (1m)-2.36%
PT rev (3m)-12.73%
EPS NQ rev (1m)16.01%
EPS NQ rev (3m)21.37%
EPS NY rev (1m)-1.08%
EPS NY rev (3m)-9.46%
Revenue NQ rev (1m)0.31%
Revenue NQ rev (3m)0.58%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.62 | ||
| Fwd PE | 37.33 | ||
| P/S | 2.24 | ||
| P/FCF | 20.18 | ||
| P/OCF | 18.31 | ||
| P/B | 7.65 | ||
| P/tB | 7.94 | ||
| EV/EBITDA | 17.47 |
EPS(TTM)2.16
EY2.97%
EPS(NY)1.95
Fwd EY2.68%
FCF(TTM)3.6
FCFY4.95%
OCF(TTM)3.97
OCFY5.46%
SpS32.4
BVpS9.49
TBVpS9.15
PEG (NY)N/A
PEG (5Y)9.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.93% | ||
| ROE | 32.18% | ||
| ROCE | 19.97% | ||
| ROIC | 16.77% | ||
| ROICexc | 27.53% | ||
| ROICexgc | 28.41% | ||
| OM | 11.1% | ||
| PM (TTM) | 9.43% | ||
| GM | 43.82% | ||
| FCFM | 11.11% |
ROA(3y)12.42%
ROA(5y)13.49%
ROE(3y)33.36%
ROE(5y)36.9%
ROIC(3y)16.64%
ROIC(5y)18.07%
ROICexc(3y)27.29%
ROICexc(5y)31.4%
ROICexgc(3y)28.17%
ROICexgc(5y)32.46%
ROCE(3y)19.82%
ROCE(5y)21.52%
ROICexcg growth 3Y-18.4%
ROICexcg growth 5Y0.36%
ROICexc growth 3Y-18.27%
ROICexc growth 5Y0.46%
OM growth 3Y-17.6%
OM growth 5Y-0.82%
PM growth 3Y-18.72%
PM growth 5Y0.48%
GM growth 3Y-2.41%
GM growth 5Y-0.32%
F-Score4
Asset Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.69 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 66.63% | ||
| Cap/Sales | 1.14% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.64% | ||
| Profit Quality | 117.81% | ||
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.52 | ||
| Altman-Z | 4.93 |
F-Score4
WACC8.86%
ROIC/WACC1.89
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-42.4%
EPS 3Y-16.87%
EPS 5Y3.37%
EPS Q2Q%-86.14%
EPS Next Y-9.92%
EPS Next 2Y9.9%
EPS Next 3Y21.23%
EPS Next 5Y19.35%
Revenue 1Y (TTM)-9.84%
Revenue growth 3Y-0.29%
Revenue growth 5Y4.36%
Sales Q2Q%-11.97%
Revenue Next Year-1.42%
Revenue Next 2Y2.08%
Revenue Next 3Y3.85%
Revenue Next 5Y4.3%
EBIT growth 1Y-11.36%
EBIT growth 3Y-17.84%
EBIT growth 5Y3.51%
EBIT Next Year10.67%
EBIT Next 3Y25.27%
EBIT Next 5Y21.09%
FCF growth 1Y-14.27%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-17.12%
OCF growth 3YN/A
OCF growth 5YN/A