Corporate profits and high distributions usually do not make a good group, as one of the ways that companies “rotate” try to work by reducing costs, and sometimes, this means reducing profits while trying to reduce their cash flows.
In addition, the reason behind the company’s need to “rotate” in the first place is that it does not work well financially, which means that the profits may be at risk of cutting or fully suspended.
However, I think Nike is one of the stocks that fit the stock category. The arrow has a profit return of more than 2 %, and while this decreased from the highest level in 2025, amid almost 20 % in NKE shares during the past month, it still seems to be a purchase. Let’s discuss this in its perspective, starting with the company’s profits.
While some companies have a well -documented distribution policy, Nike does not have a declared policy on the payments. However, its profits have increased for 23 consecutive years and appear to be on the right track to become aristocratic. The company increased its profits, even during the 2008 global financial crisis, the Covid-19 in 2020. Although its profits raised a blow in the past quarters, the company increased its quarterly profits by 8 % to $ 0.40 in December 2024.
The stock profits have grown at a complex annual growth rate (CAGR) by 10.3 % over the past five years, while the annual annual growth rate over the past ten years exceeds 11 % slightly. This looks like a very decent growth, and I have no reason to believe that the company will reduce its profits any time soon. The current NIKE’s current profit is about 2.1 %, which, although it is not delicious, is well advanced for 1.3 %, which pays the S& P 500 index ($ Spx).
Meanwhile, although Nike has a healthy profit return, the payment should not be the only reason for buying stocks, because the bulk of its returns does not come from profits. Investors at Nike must expect that the largest part of their returns is a capital estimate, so it is wise to look at stock expectations.
While multiple brokerage companies, including Goldman Sachs, PIPER SANDLER, Citigroup, HSBC, Barclays, and Baired, raised the target NIK price after the profits of the company Q4 2025 last month, where shares are traded at an average target price of $ 76.63. However, the target price on the street of $ 120 is 56.8 % higher than the closure price 7 July.
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