July 28, 2025 a 07:46 am
NKE: Dividend Analysis - NIKE, Inc.
NIKE, Inc., with its robust market presence and enduring brand equity, represents a compelling investment opportunity through a combination of stable dividend growth, financial stability, and profitability. Its strategic focus on innovation and sustainability enhances its market position and long-term value proposition. As an established leader in the apparel and footwear industry, NIKE's consistent dividend payouts highlight its commitment to returning value to shareholders.
📊 Overview
NIKE operates in the Consumer Cyclical sector, a domain known for its responsive nature to economic cycles. With an impressive dividend yield of 2.55% and a history of consistent dividend increases over the past 40 years, NIKE's dividend profile reflects stability and reliability. The absence of a recent dividend cut or suspension further emphasizes its solid financial footing in navigating economic adversities.
| Aspect | Details |
|---|---|
| Sector | Consumer Cyclical |
| Dividend yield | 2.55 % |
| Current dividend per share | 1.55 USD |
| Dividend history | 40 years |
| Last cut or suspension | None |
📉 Dividend History
Examining NIKE's dividend history reveals a proven commitment to shareholder returns, evidenced by reliable payout increases over decades. Such a record is crucial for potential investors seeking consistent income. Dividend stability also underscores NIKE's strong operational performance and cash flow generation ability.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.80 |
| 2024 | 1.51 |
| 2023 | 1.39 |
| 2022 | 1.255 |
| 2021 | 1.130 |
📈 Dividend Growth
Dividend growth serves as a key indicator of a company's financial health and management's confidence in future earnings. NIKE boasts a moderate dividend growth of around 10.78% over the past five years, reflecting its solid operational performance and commitment to returning capital to shareholders.
| Time | Growth |
|---|---|
| 3 years | 10.14 % |
| 5 years | 10.78 % |
The average dividend growth is 10.78% over 5 years. This demonstrates moderate but steady dividend growth, highlighting NIKE's strong financial position.
⚠️ Payout Ratio
Payout ratios provide insights into a company’s dividend sustainability by comparing dividend payments to earnings and cash flows. NIKE's EPS-based payout ratio stands at 71.06%, while its free cash flow-based ratio is 70.00%. These figures suggest that NIKE utilizes a considerable portion of its earnings and cash flows for dividend payouts, indicative of a balanced approach to reward shareholders while retaining profits for growth and innovation.
| Key figure | Ratio |
|---|---|
| EPS-based | 71.06 % |
| Free cash flow-based | 70.00 % |
🗣️ Cashflow & Capital Efficiency
Analyzing cash flow and capital efficiency ratios sheds light on NIKE's ability to generate and allocate financial resources effectively. The company's cash flow metrics exhibit a robust Free Cash Flow Yield and Earnings Yield, signaling efficient capital management practices necessary for sustaining dividend payments and funding growth.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 2.98 % | 4.59 % | 3.63 % |
| Earnings Yield | 3.10 % | 3.95 % | 3.58 % |
| CAPEX to Operating Cash Flow | 16.59 % | 10.93 % | 11.63 % |
| Stock-based Compensation to Revenue | 1.47 % | 1.56 % | 1.53 % |
| Free Cash Flow / Operating Cash Flow Ratio | 83.41 % | 89.07 % | 88.37 % |
Strong capital efficiency ensures NIKE can invest in new opportunities while maintaining its dividend policy.
⚖️ Balance Sheet & Leverage Analysis
Reviewing NIKE's balance sheet and leverage ratios conveys insights into its financial stability and risk exposure. The relatively low Debt-to-Equity and strong Current and Quick Ratios reflect NIKE's solid financial foundation and capability to uphold liquidity and meet both short-term and long-term obligations.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 86.72 % | 82.83 % | 83.39 % |
| Debt-to-Assets | 32.36 % | 31.36 % | 30.12 % |
| Debt-to-Capital | 46.44 % | 45.30 % | 45.47 % |
| Net Debt to EBITDA | 69.43 % | 29.24 % | 91.48 % |
| Current Ratio | 2.72 | 2.40 | 2.21 |
| Quick Ratio | 1.81 | 1.69 | 1.50 |
| Financial Leverage | 2.68 | 2.64 | 2.77 |
This balanced leverage and debt management approach reinforces NIKE's risk-conscious financial strategy.
🧩 Fundamental Strength & Profitability
NIKE's profitability metrics, such as Return on Equity and Net Margin, underscore its capacity to convert sales into profit efficiently. These strong figures reflect the company's strategic advantage and competitive positioning in the market.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | 36.20 % | 39.50 % | 24.36 % |
| Return on Assets | 13.51 % | 14.96 % | 8.80 % |
| Net Margin | 9.90 % | 11.10 % | 6.95 % |
| EBIT Margin | 11.55 % | 12.29 % | 8.39 % |
| EBITDA Margin | 13.23 % | 13.93 % | 8.39 % |
| Gross Margin | 43.52 % | 44.56 % | 42.73 % |
| Research & Development to Revenue | 0.00 % | 0.00 % | 0.00 % |
These profitability metrics highlight NIKE’s excellent resource utilization and competitive strength, vital for sustaining profit growth.
📈 Price Development
✅ Dividend Scoring System
| Criteria | Score | Indicator |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 34/40
🗣️ Rating
NIKE, Inc. presents a strong dividend investment opportunity with its stable and growing payouts, supported by a robust financial framework. Its solid fiscal performance and strategic market positioning make it an attractive option for dividend-seeking investors. Based on the analysis, a "Buy" recommendation is suggested for investors looking for a well-balanced dividend stock with growth potential.