How much to invest in Nike stock for $1,000 in annual dividends (2026)

Core Viewpoint - Nike is currently undergoing a challenging reset, raising questions for investors about the sustainability of its dividend payouts amidst operational struggles [1][2]. Dividend Growth - Nike has a strong history of paying and increasing dividends, with an annual dividend growth from $0.16 per share in 2006 to $1.64 per share in 2026, reflecting an annual growth rate of over 12% [3]. - If Nike increases its dividend this year, it will join the Dividend Aristocrats, a group of S&P 500 companies that have raised dividends for 25 consecutive years [3]. Financial Performance - Despite current challenges, Nike generated over $2.4 billion in free cash flow over the past year, which comfortably covers its annual dividend obligation of approximately $1.7 billion [4]. - The dividend yield has increased to 2.4%, up from less than 1% in 2021 and the historical average of around 1%, reflecting a 63% decline from its all-time highs [5]. Turnaround Strategy - Nike is in the process of addressing multiple issues, including reliance on classic sneakers, a direct-to-consumer strategy that has alienated wholesale partners, and competition from emerging brands [10]. - The company aims to increase revenue from $46.3 billion to $58 billion, adjusted EPS from $2.16 to $4.22, free cash flow from $3.27 billion to $3.91 billion, and annual dividends from $1.57 per share to $2 per share [9].