As a company that frequently posts profits in the billions of dollars, you can bet there’s usually plenty of cash on hand to fund Pfizer’s dividend. Not only that, the company keeps declaring dividend raises every year, and while these are typically incremental, they do add up. These days, combined with that sunken share price, Pfizer dispenses a high-yield dividend that tops 6%.

Quick, name a top athletic apparel brand!

Most likely, your response was “Nike,” since after many years it is still the most famous maker and purveyor of cool shoes for every conceivable sport, and the clothing and accessories that complement them. The company’s “swoosh” logo is instantly recognizable.

Few businesses achieve that kind of brand power. In the likely case it doesn’t diminish much, this should keep Nike front of mind for many people who like such products.

The company needs this now, since it’s been in a slump for years. Former CEO John Donahoe shifted the company’s sales strategy to digital and direct sales, forsaking the broad retail market. While this looked good on paper in these online-everything times, the move made Nike less of a presence. This diminished the power of the brand, and — not coincidentally — resulted in weaker sales growth and even recent declines.

Donahoe is no longer in the CEO position. Last month, Nike brought in 32-year company veteran Elliott Hill to replace him. Hill was at the shoe and apparel maker during its many glory years, when growth was robust and the brand was a choice selection at the top athletic wear retailers.

At the very least, a change in strategy is coming, and I’d expect Nike to revert to its previous methods of pushing product onto third-party retailers. Innovation could get a boos, too, since Hill surely remembers how well the company did with memorably unique, proprietary goods like Air Jordans.

Meanwhile, despite sputtering growth, Nike has held steadfast to its policy of paying a dividend. It is not only a reliable payer every quarter, it’s also a constant lifter, having declared dividend raises consistently since 2004. Free cash flow has been on the rise, providing not only enough room for the current payout, but likely future dividend raises, too.

Dividend raises tend to be declared near the end of every calendar year, so we can expect a new one to be announced by Nike soon. At the moment, the company’s quarterly distribution is $0.37. This yields 1.9% at the current stock price, comfortably above the 1.3% average of S&P 500 index component stocks and helping make Nike a stock to buy.

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*Stock Advisor returns as of November 4, 2024

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike and Pfizer. The Motley Fool has a disclosure policy.

2 Magnificent S&P 500 Dividend Stocks Down Year to Date to Buy and Hold Forever was originally published by The Motley Fool