NIKE (NYSE: NKE) is one of the stock market’s most shareholder-friendly capital allocators.

In most years, it pays out 1/3 of its free cash flow as a cash dividend. And it uses the other 2/3 to repurchase shares.

This shareholder-friendly capital return strategy is working. During the past decade, NIKE has tripled its annual dividend payout, from $0.48/share in 2014 to $1.42 here in 2024. During that same timeframe, it’s also reduced its outstanding share count by 15%.

Image Source: Ycharts

Yet the stock has struggled during these past few years. That’s largely been due to COVID, international conflicts, and an increasingly-complex global supply chain.

Might those short-term issues be fixable or survivable? And if so, is NIKE’s lagging stock price an opportunity?

I believe it might be. NIKE’s dividend yield just surpassed 2%. It hasn’t been that high in 15 years, since Mar 2009. And the repurchase plan is reducing the share count even more while the stock price is low, giving investors a larger pie of the growing pie.

Long-term investors might consider now a great time to “just do it” and put NIKE on their watch list.

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