From a financial perspective, Nike is much larger than Adidas but, in recent years, Adidas has accelerated its growth. Nike didn’t make it to the top by sheer luck. She is currently based in New York. When Adidas-sponsored teams such as the German Football National Team won the World Cup, sales of jerseys, kits, and shoes increased. I will analyze the following aspects of both companies: Nike, founded in 1964 by Bill Bowerman and Phil Knight, takes its name from Nike, the Greek Goddess of victory. Since the problem was rooted in overproduction, Nike CEO Matt Parker says the company is set to undergo a massive transformation. Totting up the scores, it’s pretty much a shared win for Adidas and Nike on the criteria we looked at. The company manufactures sportswear and equipment, operates its own retail stores and employs more than 73 thousand people worldwide. In addition to marketing hundreds of products under its own name, the company owns plethora of other well known brands, including but not limited to Air Jordan, Air Force 1, Air Max, Nike Skateboarding, Nike CR7, Converse and Hurley International. Under Armour CEO Kevin Plank admitted that they will deliver fresh products and innovation in their offerings to try to stop the bleeding in the next quarters. In sum: Adidas’ moat is constituted by its deep branded portfolio, intangible assets (long history of product innovation) and key sponsorships (Adidas recently pried James Harden away from Nike). While they are selling similar products, Nike products are more expensive than Adidas because all Nike brand has high and advance technology. In the US, Nike has a clearer advantage over its rival in terms of Impression score among all respondents. reports that the company is forced to save $130 million in costs through cutting jobs, inventories and facilities. She also covers the intersection of media and technology, and delves into interesting topics on entertainment. Nike has dominated the market for a long time. In sum: Nike’s dividend yield is low but the payout is reliable. Nike And Adidas Sustainable Initiatives. If Nike continues to grow the dividend, it can can reach dividend aristocrat status in less then 10 years. Nike’s stock price has increased 350% in 10 years, which represents an average annual growth rate of 35%. This means that the stock is currently trading at 21.5 times its earnings, which is reasonable. Analysis of Nike vs. Adidas I have chosen to take a closer look at the companies Nike, and Adidas and how they compare financially with the ultimate goal of being able to identify the “best” stock. Under Armour:18.5/25+ For more on this topic, see: 1. I’m not sure about the Supercourt but as they are very similar, I’d go for a size 7.5 too for that one. While competitors such as Puma, Under Armor and New Balance are well established and growing, they have failed to break up this duopoly. More businesses are investing in company culture—here's why. While the growth rate is erratic, with wild swings in dividend increases, it is consistently superior to Nike’s. The brand has built several sources of competitive advantage which include technology, marketing, supply chain as well as product design and quality. The battle for supremacy between Nike and Adidas has been going on since time immemorial. Nike and Adidas do not get along, and their competition to claim the two biggest sneaker markets in the world, the United States and China, has gotten so heated that some have even called their faceoff a war.. Adidas’ current dividend yield of 1.87% is higher than Nike’s. However, we do note an unfortunate deceleration of the dividend growth rate in recent years, with a 10-year growth rate of 13.5%, a 5-year growth rate of 12.6%, a 3-year growth rate of 11.1% and a 1-year growth rate of 10.3%. However, there is a red flag: the dividend has been cut in the past at least twice since 2008 which means that the company is not really crisis proof. Concerning the dividend, Adidas has the slightly higher yield and dividend growth rate but Nike has raised its dividend for the past 18 consecutive years compared to Adidas’ 4. VERDICT: Both companies pay out relatively low-yield dividends. Adidas runs bigger than Nike by up to 5 millimeters. However, Nike has much higher margins and generates greater cash flow. With the recent dip in the interest of retail stores in the U.S., just how do these two companies plan to bring back consumer engagement in their products? However, Adidas’ stock has generated greater capital gains returns and trades at a lower P/E ratio. ADIDAS’ current P/E ratio is 21.54. However, Adidas’ dividend yield and growth rate are higher but Nike has a more reliable history of consistent dividend growth. There are other well-known and high-quality brands available in the market, but for now let’s take a deeper look at these two. Summary of Nike’s assets and liabilities: In sum: Nike’s financial situation is relatively strong. Under Armour is a little off the pace but only needs a few tweaks to close the gap. Apparel. The plus point with Nike is that they have strong marketing and sponsorship agreements to back it. This means that the stocks price is trading at 30 times earnings, which is considered high. However, Nike increased its production a little bit higher, which they hoped to bring in larger profits, but it backfired because the demand decreased due to the availability of pairs. Adidas vs Nike - Which Brand is Better in 2020? The brand value of Nike has increased year-on-year since 2010 and reached around 34.4 billion U.S. dollars in 2020. For example, if you’re a women’s size 8 for Adidas, your foot is 9.7-inches long. Contrarily Nike mostly uses rubber for the soles of the shoes. A new survey from Canaccord Genuity among 1,400+ athletic apparel consumers finds Nike is way out front in innovation, fashion and purchase intent as compared with Adidas… Nike is focusing on quality while Adidas wants to increase production. Beats’ activation around the opening game led to 50m views, compared to Guinness’ 13m; something both Nike and Adidas will be looking to and waiting for as the opening game draws closer.” Adidas’ Facebook followership has grown twice as fast as that of Nike in 2016 with much higher engagement rates driven largely by its content. It reduced the number of retail partners from as high as 30,000 to just 40. This is evident when you look at the size chart Nike … However, the company lost its grip recently. Nike is taking the quality route, and Adidas is ramping up productions. About: the Adidas company was started by 'Adolf Dassler' & his elder brother 'Rudolf Dassler' in yeat 1924 under the name 'Dassler Brothers Shoe Factory'. Adidas uses Boost technology for the sole of its shoes. Since its creation in 1971, Nike started and continues to be one of the most valuable sports brands on the market. … But is this warranted? Nike’s markets are more on domestic but have expanded internationally; Adidas is well known around the world but is primarily focused on Europe. WINNER: TIE. Nike is synonymous with elite athletics as they sponsor hundreds of high-profile athletes and sports teams around the world. On the other hand, since the demand for Adidas is currently high, CFO Harm Ohlmeyer reveals that they plan to win more market share in North America. 1. Nike’s annual dividend payout is $0.98 per share and the payout ratio is 39.3%, which is reasonable. According to Business Insider, their strategies on how to get to the top are vastly different. Comparison Between Nike And Adidas 1679 Words | 7 Pages. Your choice to invest in one or the other will depend on your personal brand preference and the criteria you favor when choosing a stock. Nike is a U.S based brand of sportswear while Adidas is a German-based company. Both started using sustainable materials, sustainable production, and sustainable recycling. Adidas:22/25+ 3. (By comparison, Adidas’ market cap is $55 billion, and Under Armour’s is $10 billion.) Nike Shoe Quality. Although past performance does not guarantee similar future performance, it does provide some indication of what to expect. also matters. Moreover, Adidas’s Stan Smith and Puma’s Clyde shoes are performing beyond average in the market. 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