Dividend yield is the preferred metric for choosing dividend stocks. However, the equation has two moving parts. While, preferably, dividend yield should go up when companies increase dividends (or the numerator), quite often the opposite is true, and the yield rises when the stock falls and pulls down the denominator in the equation.
Nike (NKE) is a case in point here. The sneaker giant’s stock is trading at an 11-year low, which has pushed up its dividend yield to an all-time high of over 3.7%. The company currently pays a quarterly dividend of 41 cents, which was last raised by 2.5% last year. It has a formidable track record on dividends and has increased them for 24 consecutive years. Repeating the feat for one more year will make Nike a Dividend Aristocrat.
