Nike (NYSE: NKE) is in the middle of a major strategic overhaul, and management is optimistic that its efforts will soon improve financial performance. But investors aren’t convinced.
Shares have fallen 32% in 2026 (as of July 28). And they’re down 74% in the past five years. Excluding the past few months, the last time the stock traded at its current price was all the way back in 2014 (adjusting for the 2015 stock split).
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But this business might appeal to income investors, especially since the dividend yield is 3.81% right now. Does this make Nike the ultimate dividend stock?
When the price goes down, the yield goes up
The S&P 500 index currently pays a dividend yield of 1.08%. Investors who own a related exchange-traded fund might be starved for yield, so it’s hard to argue with Nike’s 3.81% figure.
That higher return is the direct result of the stock’s poor performance. If Nike were trading at its all-time high price of $163.63 today, the yield would fall to 1%.
What’s really encouraging, however, is that the business has never suspended its dividend. It didn’t pause the payout to conserve cash during the Great Recession or COVID-19 pandemic. And even though its financials have taken a hit in recent years, the company maintains its commitment to shareholders.
Over the past 20 years, the dividend has increased by 958%. The consumer discretionary stock can present an attractive opportunity for income seekers while it’s down so much. These investors can earn a compelling yield of nearly 4% while they wait for the company to turn things around.
There are better dividend stocks
I won’t go so far as to say that Nike is the ultimate dividend stock, though. There are other blue chip companies that are more deserving of this title.
Coca-Cola immediately comes to mind as a better holding for income investors. In February, the beverage industry leader raised its quarterly payout from $0.51 to $0.53, the 64th straight year that the dividend grew. That’s a spectacular track record, and it might be why the stock is a top position in Berkshire Hathaway’s portfolio, with its sizable passive income stream.
Coke also stands out for its operational stability. Nike continues to try to improve its product innovation and distribution strategy, while at the same time fighting off intense competition. On the other hand, Coca-Cola’s business keeps humming along with solid revenue gains and huge profits, regardless of what’s going on within its industry or in the broader economy. It’s certainly the safer stock for investors to choose.
