Nike, Inc. Dividend Stock Analysis

Oct. 31, 2013 7:28 AM ETNIKE, Inc. (NKE)3 Comments
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Dividends4Life
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Linked here is a detailed quantitative analysis of Nike, Inc. (NYSE:NKE). Below are some highlights from the above linked analysis:

Company Description: Nike, Inc. is the world's leading designer and marketer of high-quality athletic footwear, athletic apparel and accessories.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

NKE is trading at a premium to all four valuations above. The stock is trading at a 79.2% premium to its calculated fair value of $42.24. NKE did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

NKE earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for 11 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of

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Dividends4Life profile picture
43.02K Followers
My entire career has been spent in industry within the finance and accounting realm. My career started in 1985 and has included exposure to implementing SFASs

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