Is the Worst Over for These Beaten-Down Dividend Stocks in the Dow?

The Case For Nike Stock

Founded in 1964, Nike (NKE) is a global sportswear brand with a market capitalization of $130.6 billion. Although the stock has fallen 20.3% year-to-date, it has rebounded by 22% from its 2024 low.

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Nike stock faced a significant drop of about 20% on June 28 following weak fiscal Q4 and FY24 results. The company reported a 1.7% decline in total revenue to $12.61 billion, missing estimates. Despite this, Nike’s gross margin for the fourth quarter rose by 110 basis points to 44.7%, surpassing the industry median of 37.24%. The company’s profitability metrics like EBITDA and net income margins also outpace sector averages.

However, Nike’s weak top-line growth prompted a cost-cutting initiative to reduce expenses by $2 billion. Increasing competition from firms like Deckers Outdoor and On Holding poses a threat to Nike’s market dominance. Furthermore, concerns about consumer spending and the economic state in China add to the challenges faced by the company.

Analysts predict a 23.04% year-over-year decline in Nike’s earnings and a 4.77% decrease in revenue for fiscal 2025. The stock’s price-to-earnings ratio stands at 21.85x, near a decade low, indicating prevailing market pessimism.

Although Nike faces headwinds, recent positive news led to a 6% increase in its shares last Friday.

September 24, 2024

By: Alex Freidmen

The Rise of Nike Stock with Elliott Hill at the Helm

Stepping in as President and Chief Executive Officer, Elliott Hill is set to reignite the flame at Nike. With his extensive experience in senior leadership roles across continents, Hill’s return embodies a renewed sense of vigor and determination within the athletic powerhouse. Embracing the legacy of innovation and excellence, Hill’s appointment signifies a pivotal moment in Nike’s trajectory.

The Billionaire Stamp of Approval on Nike Stock

Billionaire investor Bill Ackman made a resounding statement with a substantial $230 million investment in Nike during the second quarter. This move not only bolstered confidence in Nike’s future but also served as a beacon for potential growth. Ackman’s bet on Nike echoes a sentiment of optimism and resilience in the face of market fluctuations.

The Optimistic Outlook for Disney Stock Amid Turbulent Times

Despite facing headwinds in the entertainment landscape, Disney stands tall as a beacon of creativity and resilience. The company’s steadfast commitment to innovation and storytelling continues to captivate audiences worldwide. From iconic films to transformative streaming services, Disney’s legacy remains unwavering.

The Trials and Triumphs of Disney Stock

Disney’s stock journey has been a rollercoaster ride of highs and lows. While grappling with challenges in its streaming and linear TV businesses, Disney’s theme park division shines as a beacon of hope. The company’s ability to navigate through turbulent waters underscores its resilience and adaptability in an ever-evolving market.

Navigating the Future: Investing in Nike vs. Disney

Investors stand at a crossroads, weighing the prospects of Nike and Disney in the volatile market landscape. While Nike’s resurgence under Hill’s leadership paints a promising picture, Disney’s strategic initiatives in streaming and theatrical businesses hint at a potential turnaround. Choosing between these two giants demands careful consideration and strategic foresight.

Analysis: Revival Prospects for Beaten-Down Dividend Giants in the Dow