This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Nike Looks Good for the Long Run

Whether you are a short-term trader or a buy-and-hold type, your true time horizon is "the rest of your life." The goal is to make enough money to achieve financial freedom.

Identifying great companies is important. Getting into them only at the right price is equally critical.

The athletic apparel company Nike (NKE - Get Report) has been a real wealth creator for long-term holders.

Earnings per share were $0.69 (split-adjusted) in fiscal year 2003. That year's dividend rate was $0.14. Fiscal year 2013 (ended May 31, 2013) came in 289.5% higher at $2.69. The annual payout rose by 414% over that same decade.

Must Read: Jim Cramer: I'm Sure the President Means Well

Nike's 10-year total return as of Jan. 24, 2014, was 325%, even after Nike's recent retreat from its all-time peak of $80.26 to $71.65. Its Value Line metrics couldn't be much better.

Why not simply buy Nike shares?

Nike is still a bit expensive at 24x projected EPS of $2.99 for the fiscal year ending May 31. Nike trades for 20.5x the fiscal year 2015 projection of $3.50. Both are above Nike's 10-year median multiple of 18x.

At the Jan. 24, 2014, closing quote, Nike's current yield of 1.17% remains below the company's 1.42% average payout since 2003. The firm's great fundamentals and the index buying that occurred in 2013 when Nike was added to the Dow Jones Industrial Average sent the stock to very overvalued territory.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Real Money
Try it NOW

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs