Nike designs, develops and markets an extensive line of footwear, apparel, equipment and accessory products for athletic and leisure activities in over 190 countries. Over the past ten years the company has generated an 18-20% return on equity, growing earnings and dividends 15-19% annually. While the 2008/2009 economic downturn was not particularly positive for consumer spending,
NKE performed well through the
entire recession. Longer term this
premier company should continue to generate above average profit growth as a
(1) its strong portfolio of globally recognized brands provides a competitive advantage,
(2) increased market share as a result of continued product line expansion in emerging markets and non Nike brands [Cole Haan, Converse, Chuck Taylor, Hurley and Umbro],
(3) expanding into emerging markets,
(4) stock buy back program.
(1) its customers are sensitive to economic conditions,
(2) intense competition,
(3) most of its manufacturing is overseas, thereby exposing it to local political/ economic/social as well as currency risks.
Stock Dividend Payout # Increases
Yield Growth Rate Ratio Since 2003
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
Ind Ave 16 16 NA 7 NA
*over one half of the companies in
NKE’s industry don’t pay a dividend
NKE made great progress off its March 2009
low, quickly surpassing the downtrend off its June 2008 (straight red line) and
the November 2008 trading high (green line).
Long term, the stock is in an uptrend (blue lines). Intermediate term, it is in an uptrend
(purple lines). Short term it is in an
uptrend (brown line). The wiggly red
line is the 50 day moving average. The
Dividend Growth Portfolio owns a 75% position.
The upper boundary of its is $36; the lower boundary of
its Buy Value
Range is $66. Sell Half