Nike and Apple Both Went Public 45 Years Ago. Here's How Much $1,000 in Each Would Be Worth Today.

Almost 45 years ago, in December 1980, the athletic apparel giant Nike (NKE 1.95%) and tech behemoth Apple (AAPL 1.82%) went public within 10 days of each other. And for the next 40 years, Nike’s shares outperformed Apple’s.

In a world where 1.5 billion people have iPhones, this might be surprising. But in the eight years leading up to Nike’s initial public offering (IPO), the company had grown annual revenue at an average rate of 85%, while net income had grown by an average of 100% each year. The explosive growth meant that management could rightly claim in Nike’s first annual report in 1981 that Nike had “raced ahead of its competitors” to claim the premier position in its industry.

Apple, by contrast, rang in the decade facing fierce competition from International Business Machines, which decided to enter the personal computer space with a cheaper basic personal computer that led The New York Times to wonder whether Apple could prove to be “a worthy competitor for IBM.”

With 45 years of hindsight, that rumination is funny, as Apple is now 14 times bigger than IBM by market capitalization. But at the time, Apple shares were under serious pressure, and sank almost 50% within months. This was the beginning of a ferocious battle for market share between Apple and IBM in which Apple pursued a strategy of portraying IBM’s computers as corporate and generic, culminating in an ad portraying IBM as “Big Brother.”

The ad cost $1.9 million to create and air, no small sum in the 1980s. But with 3.5 million Macintoshes selling in its aftermath, it was judged a success.

But the road ahead was still fraught for Apple. By the 1990s, the PC market was swamped with cheaper, IBM-compatible computers that ran on Microsoft Windows, and Apple’s market share fell to just 3.1% by 1997. The company almost went bankrupt after losses totaling $1.8 billion in 1995 and 1996.

Anyone in 1997 who guessed Apple would become the first trillion-dollar company must have had a crystal ball.

Nike faced no such struggles early on. It kept its capital investments low by outsourcing, which was not such a stigmatized practice then, and minimized risk through an inventory system allowing retailers to book at fixed prices under a five-month “futures” program. In 1982, The New York Times was saying of Nike, in sharp contrast to Apple, that the company was “so big that skeptics are asking if the party is already over.”

The party was not already over. Nike enlisted Tiger Woods, Serena Williams, John McEnroe, Roger Federer, and other international stars across an array of sports to help cement their brand, even paying Tiger Woods $500 million over the years. In 1997, Apple’s year of misery, Nike reported $155.8 million net income in Q4, while Apple reported a profit of less than a third of that for the entire year.

But as the story goes, an era of innovation saved Apple. Steve Jobs, returning as CEO in 1997, ruthlessly cut dozens of products and unveiled the iMac’s revolutionary design the following year. The iPod, launching in 2001, had sold 100 million units by April 2007, just when the iPhone’s summer launch was right around the corner.

Throughout this renaissance, however, Apple didn’t pay a single dividend until 2012, nor did its management repurchase a single share. Nike, by contrast, has raised its dividend each year since 2001. It has also spent billions of dollars buying back shares, including a savvy $5 billion share repurchase during the 2008 sell-off.

So, which stock has done better since its 1980 IPO?

From its split-adjusted price of $0.18 per share, Nike has returned 35,550% in capital appreciation alone as of market close on Friday, November 14. That’s enough to turn an initial $1,000 stake into $356,500.

Apple’s split-adjusted IPO price was $0.10 per share, and its Friday, November 14 close of $272.41 means it has returned 272,310%, or enough to turn an initial stake of $1,000 into $2,724,100.

While Nike’s history of paying growing dividends since 2001 would help to narrow the gap, it wouldn’t come close to closing it, reinvested or otherwise, especially since Apple has paid a dividend since 2012 that has grown by 174% over that time frame.

Last year, Apple paid out $15.2 billion in dividends, while Nike shelled out a mere $2.17 billion to investors. Anyone putting $1,000 into Apple’s IPO would now own 10,000 shares thanks to stock splits, and receive $2,600 in dividends each quarter. Meanwhile $1,000 worth of Nike’s IPO shares would be paying about $2,200 in dividends each quarter.