Nike Stock Failed to Reap Benefits of Strong 3Q18 Results

As discussed, Nike (NKE) reported third-quarter results after the market closed on March 22. The company outperformed on both earnings and sales and signaled the end of a rough patch it faced in its North American market. However, its strong performance was not reflected in its stock price the next day. Its stock closed marginally higher at $64.63. A broader market sell-off related to fears about a possible trade war stopped its price from surging.

Nevertheless, the sportswear giant’s performance was better than most competitors, who closed the day in the red. Skechers (SKX), Lululemon Athletica (LULU), and Columbia Sportswear (COLM), for instance, lost 3.6%, 1.9%, and 0.9%, respectively. The S&P 500 Index plunged 2.1%, while the seven-company S&P 500 Index was down 0.5%.

Nike delivered a strong performance in the stock market during 2017 with a gain of 23% during the year. However, this year so far hasn’t been an extraordinary one for the company. It is up a modest 3.4% YTD and is trading around 9% below its 52-week high price.

Nike announced a dividend of 20 cents per share on February 15, in-line with the previous quarter’s dividends. The company has been a regular dividend payer and has increased its dividend per share for about 16 years in a row. As a result, it is included in the list of dividend achievers, which consists of 270 companies that have increased their dividends for at least ten consecutive years.

However, the company has a low one-year forward dividend yield of 1.3%. Gap (GPS), Foot Locker (FL), and DSW (DSW) offer higher yields of 3.1%, 3.2%, and 3.7%, respectively. Nike is included in the Vanguard Dividend Appreciation ETF (VIG). VIG invests 2.2% of its portfolio in the company.

Read the next section to know about Wall Street’s view on Nike after its 3Q17 results.