Nike Stock Hands $44 Bil Back – Worth a Look?

In the last decade, Nike (NKE) stock has returned $44 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.

As it turns out, NKE stock has returned the 63rd highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Let us ask you this: Over the last 5 years, which index do you think the Trefis High Quality Portfolio outperformed – the S&P 500, S&P 1500 Equal Weighted, or both? The answer might surprise you. See how our advisory framework helps stack the odds in your favor.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for NKE. (see Buy or Sell Nike Stock for more details)

Nike Fundamentals

• Revenue Growth: -7.1% LTM and -0.3% last 3-year average.
• Cash Generation: Nearly 6.5% free cash flow margin and 7.4% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for NKE was -9.8%.
• Valuation: Nike stock trades at a P/E multiple of 34.9
• Opportunity vs S&P: Compared to S&P, you get higher valuation, lower revenue growth, and lower margins

*LTM: Last Twelve Months

That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.

NKE Historical Risk

Nike’s no stranger to big sell-offs either. It fell nearly 59% in the Dot-Com Bubble and dropped about 44% during the Global Financial Crisis. The 2018 correction wasn’t as brutal but still pulled the stock down around 21%. The Covid crash saw a roughly 40% dip, while the inflation shock in 2022 took it down over 52%. Even strong companies like Nike can take a hit when the market turns south. Favorable factors help, but they don’t make stocks immune to sharp declines.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read NKE Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.