NIKE INC -CL B (NKE) Stock Fundamental Analysis
NYSE:NKE - New York Stock Exchange, Inc. - US6541061031 - Common Stock - Currency: USD
Overall NKE gets a fundamental rating of 6 out of 10. We evaluated NKE against 50 industry peers in the Textiles, Apparel & Luxury Goods industry. NKE scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NKE is valied quite expensively at the moment, while it does show a decent growth rate. Finally NKE also has an excellent dividend rating. This makes NKE very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
NKE had positive earnings in the past year.
In the past year NKE had a positive cash flow from operations.
NKE had positive earnings in each of the past 5 years.
Of the past 5 years NKE 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NKE (11.93%) is better than 90.00% of its industry peers.
NKE has a Return On Equity of 32.18%. This is amongst the best in the industry. NKE outperforms 88.00% of its industry peers.
The Return On Invested Capital of NKE (16.77%) is better than 84.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NKE is significantly above the industry average of 11.17%.
The last Return On Invested Capital (16.77%) for NKE is above the 3 year average (16.64%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 9.43%, NKE belongs to the top of the industry, outperforming 82.00% of the companies in the same industry.
In the last couple of years the Profit Margin of NKE has remained more or less at the same level.
NKE has a Operating Margin of 11.10%. This is in the better half of the industry: NKE outperforms 76.00% of its industry peers.
In the last couple of years the Operating Margin of NKE has remained more or less at the same level.
With a Gross Margin value of 43.82%, NKE is not doing good in the industry: 62.00% of the companies in the same industry are doing better.
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
NKE has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NKE has less shares outstanding than it did 1 year ago.
NKE has less shares outstanding than it did 5 years ago.
NKE has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.85 indicates that NKE is not in any danger for bankruptcy at the moment.
NKE has a Altman-Z score of 4.85. This is amongst the best in the industry. NKE outperforms 84.00% 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.
With a decent Debt to FCF ratio value of 1.69, NKE is doing good in the industry, outperforming 78.00% of the companies in the same industry.
NKE has a Debt/Equity ratio of 0.57. This is a neutral value indicating NKE is somewhat dependend on debt financing.
NKE's Debt to Equity ratio of 0.57 is on the low side compared to the rest of the industry. NKE is outperformed by 60.00% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.69 | ||
| Altman-Z | 4.85 |
ROIC/WACC1.88
WACC8.94%
2.3 Liquidity
A Current Ratio of 2.19 indicates that NKE has no problem at all paying its short term obligations.
NKE has a Current ratio (2.19) which is in line with 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.
NKE has a Quick ratio of 1.52. This is in the better half of the industry: NKE outperforms 74.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.52 |
3. Growth
3.1 Past
The earnings per share for NKE have decreased strongly by -42.40% in the last year.
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.
NKE shows a decrease in Revenue. In the last year, the revenue decreased by -9.84%.
NKE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.36% yearly.
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
Based on estimates for the next years, NKE will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.35% on average per year.
NKE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.29% yearly.
EPS Next Y-22.39%
EPS Next 2Y6.67%
EPS Next 3Y13.05%
EPS Next 5Y19.35%
Revenue Next Year-0.32%
Revenue Next 2Y2.34%
Revenue Next 3Y3.37%
Revenue Next 5Y4.29%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
NKE is valuated quite expensively with a Price/Earnings ratio of 33.45.
Based on the Price/Earnings ratio, NKE is valued a bit more expensive than 60.00% of the companies in the same industry.
NKE is valuated rather expensively when we compare the Price/Earnings ratio to 27.52, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 43.10, the valuation of NKE can be described as expensive.
NKE's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. NKE is more expensive than 72.00% of the companies in the same industry.
NKE is valuated rather expensively when we compare the Price/Forward Earnings ratio to 35.58, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.45 | ||
| Fwd PE | 43.1 |
4.2 Price Multiples
68.00% of the companies in the same industry are cheaper than NKE, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NKE is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.08 | ||
| EV/EBITDA | 16.99 |
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 13.05% in the coming years.
PEG (NY)N/A
PEG (5Y)9.92
EPS Next 2Y6.67%
EPS Next 3Y13.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.14%, NKE has a reasonable but not impressive dividend return.
NKE's Dividend Yield is a higher than the industry average which is at 3.54.
Compared to an average S&P500 Dividend Yield of 2.35, NKE has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
5.2 History
On average, the dividend of NKE grows each year by 11.20%, 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.
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 2Y6.67%
EPS Next 3Y13.05%
72.25
-0.38 (-0.52%)
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-0.84%
Market Cap106.64B
Analysts71.82
Price Target73.64 (1.92%)
Short Float %3.13%
Short Ratio2.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
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)-1.29%
PT rev (3m)-12.73%
EPS NQ rev (1m)16.01%
EPS NQ rev (3m)20.9%
EPS NY rev (1m)-14.77%
EPS NY rev (3m)-21.99%
Revenue NQ rev (1m)0.31%
Revenue NQ rev (3m)0.6%
Revenue NY rev (1m)1.18%
Revenue NY rev (3m)1.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.45 | ||
| Fwd PE | 43.1 | ||
| P/S | 2.23 | ||
| P/FCF | 20.08 | ||
| P/OCF | 18.22 | ||
| P/B | 7.61 | ||
| P/tB | 7.89 | ||
| EV/EBITDA | 16.99 |
EPS(TTM)2.16
EY2.99%
EPS(NY)1.68
Fwd EY2.32%
FCF(TTM)3.6
FCFY4.98%
OCF(TTM)3.97
OCFY5.49%
SpS32.4
BVpS9.49
TBVpS9.15
PEG (NY)N/A
PEG (5Y)9.92
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 | 4.85 |
F-Score4
WACC8.94%
ROIC/WACC1.88
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-22.39%
EPS Next 2Y6.67%
EPS Next 3Y13.05%
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-0.32%
Revenue Next 2Y2.34%
Revenue Next 3Y3.37%
Revenue Next 5Y4.29%
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