6. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
NIKE, Inc. (NYSE:NKE) ranks sixth on our list of the best dividend stocks. The multinational footwear and apparel company offers products for men, women, and children. The company has raised its payouts for 23 years in a row. Currently, it offers a quarterly dividend of $0.40 per share and has a dividend yield of 2.07%, as of December 10.
While NIKE, Inc. (NYSE:NKE) has built strong investor trust over time, the company has encountered challenges in recent years. To address these issues, it is implementing new strategies, including appointing a new CEO. This leadership change marks the return of Elliott Hill, a seasoned company veteran who retired in 2020 after serving as president of global commercial and marketing operations. With Hill’s extensive experience and track record of success, the company aims to revitalize its approach and navigate its path forward.
Mar Vista Investment Partners, LLC also highlighted NIKE, Inc. (NYSE:NKE)’s strength in its Q3 2024 investor letter. Here is what the firm has to say:
“We exited our NIKE, Inc. (NYSE:NKE) investment following an 18% stock price recovery from recent lows. This decision was prompted by Nike’s revised fiscal year 2025 forecast, which projects negative mid-single-digit revenue growth. The company faces a significant slowdown in lifestyle product sales, expected to persist for at least another year. Our analysis indicates sales and earnings will likely fall 15-20% below management’s previous conservative estimates. This downward revision stems from insufficient product innovation, wholesale channel shifts, and intentional supply reduction in lifestyle franchises. While reduced guidance and new leadership might provide a catalyst for the stock’s performance, the path to fundamental improvement is still unclear.
Despite maintaining its position as the global sportswear leader, Nike’s intrinsic value has stagnated. The company’s efforts to reinvigorate innovation and re-engage with wholesale channels may eventually yield growth, but our skepticism regarding management’s execution has increased. We believe Nike needs to reset investors’ expectations on margins and profits while revitalizing its top-line prospects. A short-term profit sacrifice, though painful, could provide the necessary reset to achieve financial expectations in future years. We will continue monitoring Nike’s turnaround and reassess the investment if fundamentals and management execution improve.”
In fiscal Q1 2025, NIKE, Inc. (NYSE:NKE) reported revenue of $11.6 billion, which fell by 10% from the same period last year. The company experienced an 8% year-over-year decline in wholesale revenue, totaling $6.4 billion. Despite this, its cash position remained strong, with cash and cash equivalents increasing to $8.5 billion from $6.2 billion in the same period last year. Over the trailing twelve months, the company generated $7.9 billion in operating cash flow.
NIKE, Inc. (NYSE:NKE) was a popular buy among elite funds at the end of Q3 2024, as hedge fund positions in the company grew to 75, from 66 in the previous quarter. The stakes owned by these hedge funds have a collective value of over $5 billion. With over 16.2 million shares, Pershing Square was the company’s leading stakeholder in Q3.
