Why NYSE:NKE provides a good dividend, while having solid fundamentals.

NIKE INC -CL B (NYSE:NKE) has caught the attention of dividend investors as a stock worth considering. NYSE:NKE excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

Assessing Dividend Metrics for NYSE:NKE

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 2.96.
• The dividend of NKE is nicely growing with an annual growth rate of 11.10%!
• NKE has paid a dividend for at least 10 years, which is 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.
• NKE's earnings are growing more than its dividend. This makes the dividend growth sustainable.

A Closer Look at Health for NYSE:NKE

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 6.63 indicates that NKE is not in any danger for bankruptcy at the moment.
• The Altman-Z score of NKE (6.63) is better than 87.76% of its industry peers.
• 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 69.39% 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.
• NKE has a Current Ratio of 2.74. This indicates that NKE is financially healthy and has no problem in meeting 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 63.27% of the companies in the same industry.
• NKE's Quick ratio of 1.85 is fine compared to the rest of the industry. NKE outperforms 71.43% of its industry peers.

Profitability Insights: NYSE:NKE

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:NKE, the assigned 8 is a significant indicator of profitability:

• NKE has a Return On Assets of 14.24%. This is amongst the best in the industry. NKE outperforms 93.88% of its industry peers.
• NKE has a better Return On Equity (37.46%) than 93.88% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 18.55%, NKE belongs to the top of the industry, outperforming 89.80% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 10.66%.
• The Profit Margin of NKE (10.28%) is better than 85.71% of its industry peers.
• In the last couple of years the Profit Margin of NKE has grown nicely.
• With an excellent Operating Margin value of 11.76%, NKE belongs to the best of the industry, outperforming 83.67% of the companies in the same industry.

More Best Dividend stocks can be found in our Best Dividend screener.

Check the latest full fundamental report of NKE for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.