Nike (NKE) is an iconic brand that has outperformed the S&P 500 decade after decade and led to massive returns for investors since the company went public in 1980. The company has that “it” factor, and is able to generate more revenue, higher net profit margins and a higher return on equity than the competition.
But higher stock prices have kept many investors away from the company.
The company’s stock has dipped 20% since highs in 2015 and currently trades at $54.36 a share, down from $67.17 reached on November 27, 2015. The dip is easily overlooked by a 167% gain over the last 5 years and a 44.77% gain in the past two years.
Nike’s fall in stock price is an indicator that it’s time to buy the company’s stock.
Nike has $31.9 billion in revenue, profit margins of 11.8% and return on equity of 30.6%. Compare these figures to Adidas (ADS), a close competitor, and the figures are even more impressive. Adidas boasts $19.8 billion in revenue, profit margins of 4.6% and a return on equity of 13.3%.
Nike sales have benefitted in recent days following the NBA Finals and a commercial from the company honoring Cleveland’s first championship in 52 years. The company also released a new line of Air Jordan sneakers to commemorate the Charlotte Hornets.
Historically, Nike is a stock that is a sure bet, and has outperformed the general market and the competition. Low prices for the company’s stock is the main reason to buy Nike.