The Coca-Cola Company (KO), Under Armour Inc (UA): Does NIKE, Inc. (NKE) Deserve to Be in the Dow?

Under Armour Inc (NYSE:UA) has become a credible competitor to Nike, with a history of taking Nike head on even in the swoosh’s areas of traditional strength. Under Armour took the initiative in athletic apparel with its compression-fabric technology, and Nike found itself in the unusual role of reacting, rather than leading, in a product line. Under Armour Inc (NYSE:UA) has even set its sights on Nike’s bastion of strength, the athletic-shoe market, with a focus on capturing the youth market in an effort to up-end Nike’s long-term prospects as future generations of consumers reach adulthood and start spending.

Will Nike earn its place in the Dow?

Nike does bring one thing to the Dow that has been in short supply among many of its consumer brands lately: growth potential. Even consumer branding giant The Coca-Cola Company (NYSE:KO) has struggled in its growth efforts lately, especially in its core North American segment, as attitudes toward its carbonated beverages begin to swing against the company. Coke has worked hard to offset those headwinds by focusing on new markets, but even they haven’t provided the gains to satisfy investors entirely.

Nike’s growth, by contrast, has continued, with its core North American market posting 18% revenue gains in fiscal 2013 to help pull overall revenue up 9% companywide. With huge potential remaining in international markets, Nike has plenty of room to become an even more important part of the Dow in future years, earnings its place among the other elite stocks in the average.

The article Does Nike Deserve to Be in the Dow? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Coca-Cola, Nike, and Under Armour. The Motley Fool owns shares of Nike and Under Armour.

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