Want $1,000 in dividend income? Here’s how much you should invest in Nike stock.

The giant manufacturer of sports shoes NIKE (NKE -0.37%) is a consistently profitable company with a history of dividend growth. Does this mean you should put on your running shoes and rush out to buy Nike stock?

It is possible to generate $1,000 in dividend income from Nike stock if your account is large enough. However, after taking note of Nike’s less-than-stellar recent financial performance, you may end up looking elsewhere for income opportunities.

Reach $1,000 in dividend payments

For what it’s worth, Nike’s annualized forward dividend yield of 1.75% beats the consumer cyclical sector’s average yield of about 1%. In addition, Nike has increased its quarterly dividend distributions by $0.03 per share each year since 2019.

You may be too late to buy Nike stock in time for the September 3rd ex-dividend date, but that should be fine if Nike continues its $0.03 per share dividend growth pattern once per share. In this case, the company’s next four distributions would be $0.40 per share per quarter, or $1.60 per share annualized.

Therefore, assuming payouts of $1.60 per share, you would need to purchase 625 shares to get $1,000 in dividend distributions over the next year. If Nike’s stock price is around $83, then you would have to invest $625 x $83, or $53,125, and wait a year to receive $1,000 in cash payments.

A decline in digital sales

Nike’s sector-beating return is good, but it’s really just a consolation prize in light of the company’s declining share price. Over the past year, Nike shares have lost value and underperformed S&P 500.

Notably, Nike’s revenue was flat year-over-year in fiscal 2024, which ended May 31, and the company’s fourth-quarter revenue fell 2 percent. Nike’s fourth-quarter online sales took a hit, with Nike Direct revenue falling 8% to $5.1 billion, mainly due to a 10% decline in Nike Brand Digital revenue.

So it’s wise to wait and see if Nike can improve its digital sales trends. Otherwise, the potential $1,000 in dividends probably won’t be worth the risk.