Want to boost your income with Nike dividends? Here’s how much you need to invest in order to reach a specific income target.
If you’re eyeing $1,000 in annual dividend income from Nike (NKE 1.77%) stock, you’re likely curious about how much you need to invest. First of all, congratulations on setting a specific investment goal! Now let’s see how reachable it might be.
Based on the athletic shoe and apparel giant’s most recent dividend announcements, I can calculate a forward-looking dividend yield to help answer that question.
Nike’s dividend history
Nike’s quarterly dividend is currently $0.37 per share. That’s up from $0.34 per share a year ago, part of Nike’s consistent payout increases over the years:
NKE Dividend data by YCharts
Let’s do the forward-looking dividend yield math
To figure out the forward-looking dividend yield, start by annualizing the most recent quarterly dividend. The fresh dividend amount of $0.37 is multiplied by four, since there are four quarters in a year. This works out to an annual dividend of $1.48 per share.
Next, consider Nike’s current stock price. As of June 17, 2024, Nike’s stock is trading at $94 per share. This information shows the dividend yield by dividing the annual dividend by the stock price. In this case, the yield comes out to about 1.57%.
How much to invest in Nike for $1,000 in yearly dividend income
To achieve $1,000 in annual dividend income, the required investment follows this equation:
- Required investment = $1,000 / forward dividend yield
Nike’s current forward dividend yield is 1.57%; $1,000 divided by 1.57% (or 0.0157 in decimal terms), results in $63,694. Hence, to earn $1,000 in dividend income annually from Nike stock, you would need to invest approximately $63,694 today.
It should be noted that Nike’s dividend yield is unusually high at the moment. The never-ending payout increases have met lower share prices since the start of the inflation-based economy crisis.
For comparative purposes, the forward yield stopped at 1.17% a year ago. At that point, securing a $1,000 annual dividend income would have required a Nike investment of $85,470.
Assuming that Nike can get back on its proverbial feet after this inflation-powered stumble, you should consider locking in Nike’s modest buy-in price and generous dividend yield while the getting is good.
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.