Nike has raised dividends annually for two decades.
Investors often count on dividends to provide regular income. For those wondering how much to expect from a stock holding, it’s possible to calculate a company’s expected dividends for the next year based on simple math and some assumptions.
Nike (NKE -0.29%) has a long history of paying dividends. How much can investors expect to receive in 2025?
Image source: Getty Images.
Calculating the payout
Nike currently pays a $0.37 per share quarterly dividend. The company repurchased about 12 million shares (net of options exercised) during the fiscal first quarter (ended Aug. 31). But that doesn’t affect the calculation too much, given the large number of common shares. Multiplying the roughly 1.5 billion outstanding Class A and Class B shares by the current quarterly rate equals roughly $515 million in fiscal first-quarter common dividend payments.
Assuming the share count doesn’t drastically change, $515 million times four equals about $2.1 billion. That doesn’t take into account a possible dividend increase, however. The board of directors has increased payments annually since 2004, historically in January.
Nike’s results have been weak lately, including a 10% decline in first-quarter revenue and a 26% drop in diluted earnings per share. That’s likely part of what’s behind the shares having declined nearly 26% this year.
However, with a 42% payout ratio, the company can afford to boost dividends. And returning cash to shareholders via dividends and share repurchases remains an important priority for the company.
Assuming a 5% increase, lower than last year’s nearly 9%, Nike will have a $0.39 quarterly rate. Based on that assumption, calendar 2025 dividends would total $2.3 billion.
At the current dividend rate, Nike’s shares have a 1.8% dividend yield. While that’s higher than the S&P 500‘s 1.2% yield, investors can find stocks with higher yields and better profitability growth potential.