1 Dividend Stock Down 47%: Should You Buy It Hand Over Fist Right Now?

Core Viewpoint - Nike is facing challenges despite its strong historical performance and dividend track record, with current market conditions leading to flat revenue growth and increased competition [1][4][6]. Company Performance - Nike announced a quarterly dividend of $0.37 per share in November, marking the 22nd consecutive year of dividend increases [2]. - Over the past decade, Nike's revenue grew at an annualized rate of 7.3%, while net income increased at 7.4% annually, supported by a solid operating margin [2]. - The company has a strong brand presence and marketing strategy, which has helped maintain its competitive edge [3]. Current Challenges - The global economic environment is uncertain, with high interest rates and consumer concerns about inflation affecting discretionary spending [4]. - Nike's revenue was flat year-over-year in the third quarter, and management projects only a 1% increase in sales for the full fiscal year, significantly below its long-term growth targets [4][5]. - Competitors in China and North America, such as Lululemon Athletica, are experiencing healthy growth, raising concerns about Nike's market position [5]. Investor Perspective - Despite recent challenges, Nike's long history of dividend increases and a payout ratio of 48% suggest potential for future dividend growth [6]. - However, the current price-to-earnings ratio of 27.5 raises concerns about the stock's valuation, especially given the company's struggles [6]. - It is recommended for investors to monitor Nike for signs of fundamental improvements before making investment decisions [7].