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Can Nike Swoosh Past Analysts’ Estimates in Fiscal 4Q17?

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Part 4
Can Nike Swoosh Past Analysts’ Estimates in Fiscal 4Q17? PART 4 OF 5

Nike Has One of the Best Upsides among Sportswear Stocks

Stock market performances of sportswear stocks

2017 hasn’t been a great year for sportswear stocks so far. Lululemon Athletica (LULU), Under Armour (UAA), and Columbia Sportswear (COLM) have fallen 29%, 16.5%, and 4.7% year-to-date (or YTD).

The performances of sportswear retailers have been even worse. Dick’s Sporting Goods (DKS) and Foot Locker (FL) have fallen 27% and 33%, respectively, YTD.

Nike Has One of the Best Upsides among Sportswear Stocks

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Currency headwinds, a highly promotional retail environment in North America, and retail bankruptcies have been driving the poor stock performances of these sportswear companies.

Despite ongoing headwinds, Nike has managed to remain in the green. The company has risen 4% YTD. It has, however, underperformed the S&P 500 Consumer Staples Sector Index and the S&P 500 Index, which have risen 7.7% and 9%, respectively, YTD.

The Consumer Discretionary Select Sector SPDR ETF (XLY), which invests 2.7% of its portfolio in Nike, has risen 10% YTD.

Is there more upside to Nike?

Nike is currently trading at $52.85, 14% below its 52-week high price. Wall Street expects its stock price to touch $62.02, indicating an upside of ~17% over the next 12 months. The company’s stock price has been revised downward in the last month. Read more about analysts’ actions on NKE in the next article.

Nike has a better upside compared to Under Armour, Lululemon, and Columbia Sportswear. The stock prices of these companies are expected to rise 1%, 9%, and 13%, respectively, in the next 12 months.

Dividends

Nike is part of the dividend achievers list, which is made up of 270 companies that have increased their dividends for at least ten consecutive years. Nike, which has increased its dividends for the last 14 years, currently has a dividend payout ratio of 21.5%. The company has a goal of keeping its payout ratio in the 25%–35% range over the next four to five years.

Nike’s dividend yield is currently hovering around 1.4%, compared to Columbia Sportswear’s 1.3% and Foot Locker’s 3.2%. In comparison, Lululemon Athletica and Under Armour don’t pay dividends.

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