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Give Nike (NYSE:NKE) founder Phil Knight credit … you know, beyond reinventing athletic footwear, smartly latching onto and building the business through Michael Jordan, then making sure another all-time great, LeBron James, was signed up.

Nike pulled off the sponsorship coup of the year when they garnered a five-year deal to be the exclusive on-field apparel provider for all 32 NFL teams, ousting Adidas‘ (PINK:ADDYY) Reebok unit, which had held jersey rights for a decade.

You can order the Nike uniforms — dubbed the “Elite 51” series — via the NFL Shop, team websites, team shops, sports retailers — just about anywhere. Nike is believed to have paid $1.1 billion for the deal; while the effect on Nike’s revenues are unknown, Reebok had brought in about $350 million annually on NFL gear sales.

Nike reached all-time highs in late spring before slumping on a poor quarterly performance and outlook, though it has rebounded and currently is trading flat on the year. The company also recently announced it would increase sneaker prices before back-to-school season, reportedly to offset rising labor and commodity costs.

While a trailing P/E of 20 is a bit high, its forward P/E of 16 is a bit more down to earth. NKE also pays a modest quarterly dividend — currently yielding 1.5% — that has grown by 50% since 2008. Nothing to hang your hat on, but it should provide a little downside protection.

Earnings are expected to grow 14% next year, and the NFL contract could pay off in spades — especially given Nike’s penchant for pushing the envelope with cutting-edge design.

Article printed from InvestorPlace Media,

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