10 Stocks Taking Care of Investors: No. 6 Nike (NKE)

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June 12, 2009 2:01 PM EDT

These 10 stocks have been rewarding investors with share buybacks, strong dividends, sales/earnings and stock performance and are worthy cornerstones of any portfolio. You can track the entire series here.

Number 6: Nike (NYSE: NKE)

Nike is the largest seller of athletic footwear and athletic apparel in the world. Nike sells its products in over 180 countries around the world. Nike is mainly known for selling products with its famous Nike-swoosh, but also owns brands such as Cole Haan, Converse, Hurley and Umbro. In 2008, sales in the U.S. accounted for approximately 43% of total revenues, compared to 47% in fiscal 2007 and 47% in fiscal 2006. In fiscal 2008, non-U.S. sales accounted for 57% of total revenues, compared to 53% in fiscal 2007 and 53% in fiscal 2006. Due to the global slowdown, Nike is trying to contain costs and recently announced it would cut 5% of its global workforce.

Shares Buybacks: As of its latest update, Nike has $300 million remaining under a $3 billion program approved in June 2006. In September 2008, Nike approved a new $5 billion share repurchase program which will commence upon completion of the current $3 billion plan.

Dividends: Nike currently pays out a quarterly dividend of $0.25 per share. The dividend yields a solid 1.8%. The company's quarterly dividend has grown from a $0.02 per share payout in 2002 - that's a more than 12-fold increase!

Revenue/Profit: Nike has grown its revenue from $12.3 billion in 2004 to $18.6 billion in 2008. Gross margin % in that time has grown from 42.9% to 45%. Net income in that time has doubled from $946M to $1.88B. Diluted EPS in that time has more than doubled from $1.75/share to $3.74/share. Nike has nearly $2 billion of cash on hand with relatively low long-term debt of $438 million. In its latest quarter, Nike topped Wall Street estimates by 20 cents per share, reporting EPS of $0.99 per share. For the year, Nike is expected to earn $3.76 per share and next year the company is expected to earn $3.61 per share.

Stock Performance: Shares of NKE have greatly outperformed the broader market. Shares of NKE are up 10% YTD, versus a 4% rise in the S&P 500. Over the last year, NKE fell 16% versus a 30% slide in the S&P 500. Over a 5 year period, NKE is up 58% versus a 17% slide in the S&P 500.

With billions in past share repurchases and billion more remaining under its current plan, a solid and ever-increasing dividend payout, strong revenue/earnings growth, and market-beating stock performance, Nike is "taking care of investors."