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

By Mill Chart

Last update: Apr 8, 2024

Take a closer look at NIKE INC -CL B (NYSE:NKE), a stock of interest to dividend investors uncovered by our stock screener. NYSE:NKE excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

A Closer Look at Dividend for NYSE:NKE

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:NKE was assigned a score of 7 for dividend:

  • NKE's Dividend Yield is a higher than the industry average which is at 2.83.
  • On average, the dividend of NKE grows each year by 11.10%, which is quite nice.
  • NKE has been paying a dividend for at least 10 years, so it has 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.
  • 39.61% of the earnings are spent on dividend by NKE. This is a low number and sustainable payout ratio.
  • The dividend of NKE is growing, but earnings are growing more, so the dividend growth is sustainable.

ChartMill's Evaluation of Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:NKE, the assigned 7 reflects its health status:

  • An Altman-Z score of 5.97 indicates that NKE is not in any danger for bankruptcy at the moment.
  • NKE has a better Altman-Z score (5.97) than 88.00% of its industry peers.
  • NKE has a debt to FCF ratio of 1.42. This is a very positive value and a sign of high solvency as it would only need 1.42 years to pay back of all of its debts.
  • NKE's Debt to FCF ratio of 1.42 is fine compared to the rest of the industry. NKE outperforms 68.00% of its industry peers.
  • 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.
  • 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.
  • With a decent Current ratio value of 2.74, NKE is doing good in the industry, outperforming 62.00% of the companies in the same industry.
  • NKE has a better Quick ratio (1.85) than 78.00% of its industry peers.

Understanding NYSE:NKE's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:NKE, the assigned 8 is noteworthy for profitability:

  • NKE has a better Return On Assets (14.24%) than 92.00% of its industry peers.
  • NKE's Return On Equity of 37.46% is amongst the best of the industry. NKE outperforms 96.00% of its industry peers.
  • The Return On Invested Capital of NKE (18.55%) is better than 92.00% of its industry peers.
  • NKE had an Average Return On Invested Capital over the past 3 years of 19.88%. This is significantly above the industry average of 10.10%.
  • NKE's Profit Margin of 10.28% is amongst the best of the industry. NKE outperforms 90.00% 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 84.00% of the companies in the same industry.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of NKE

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.

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NIKE INC -CL B

NYSE:NKE (5/24/2024, 7:04:00 PM)

Premarket: 91.9 +0.15 (+0.16%)

91.75

+0.35 (+0.38%)

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