Don’t Run Away from Dividends. NKE

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We are in after-hours trading, and we are not running away from a dividend opportunity. We have found a quick sale and we are running towards it. What possible happening in the stock market that went on sale on a Tuesday night. Nike (NKE) reported earnings that were a little less than expected. So Nike (NKE) went on sale, and we are just buying it. As they say, “Just Do It” (Nike).

Nike (NKE) is a sports apparel company and was founded in 1964. Nike (NKE) not only makes and sell sporting apparel, but they also have a R&D (research and development) department to keep improving their products. Being a R&D leader helps keep a competitive advantage with products, and therefore, pricing. With the long history of being a great band name and researching more products for the future, they should keep being a great company for years to come.

After hours, Nike (NKE) is down 6%, at least when we bought it. We believe this will give us a good entry point for our purchase. In the last 10 years, Nike (NKE) has double 2.5 times, from about $10 to $60 a share. It is also down by 10% from its 52 week high, so we know we are not buying at its all-time high.

Nike (NKE) revenue is actually up 8% to $8 billion. However, it missed the predicted number by $170 million, but it is still up a lot. Considering the strong $US, all of the weak commodity prices, china, and everything else, this could have been much better if more macro events where in their favor. However, low commodity prices are probably good for them from a cost standpoint.

In the stock world of looking for dividend yield, Nike (NKE) has a low dividend yield of 1%. With all of our high yielders, having a high dividend grower will diversify our portfolio. Nike (NKE) has double its dividend twice in the last 10 years. We expect the dividend to keep doubling. In fact, they could double it tomorrow and still be paying only 60% of earnings, with the free cash flow percent being even lower. They have been paying an increasing dividend for 14 years, and this is likely to continue.

With this great company, we bought 4 shares for $250.96, including the commissions that help pay for the advertising at sporting events. We are starting low at $2.56 power year in dividends, but we expect a lot of growth in the future. When opportunity strikes, do you run towards it or away?

Do you think Nike (NKE) is a good stock for a dividend portfolio? Leave your opinion in the comment section below.

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