Analysis of the dividend policy of the leading firms in the sportswear industry

Abstract

In the field of corporate finance, besides investment and financing decisions, it is now common to speak about a third fundamental decision: the one concerning the distribution of dividends. The objective of this dissertation is to compare the dividend policy of the three leading firms in the athletic apparel, accessories and footwear companies, namely Nike, Adidas and Asics, highlighting similarities and discrepancies. In the first chapter, we will provide a general introduction regarding the dividend policy and its main indicators as well as a brief description of stock buybacks as an alternative mechanism to remunerate shareholders. In the second chapter we will move from theory to practice and we will discuss about the methodology used to analyse the chosen firms. From chapter 3 to chapter 5, we will investigate the current dividend policy of each chosen firm and understand whether (and why) they returned too much or too little, by comparing the main indexes with respect to industry standards. Then, we will use the cash flow approach in order to assess the appropriateness of the current dividend policy of each firm and finally, we will discuss about some alternatives. Finally, results obtained through the analysis are compared and conclusions drawn.