Usually, income investors shy away from any type of stock that relies on fashion trends for success. What's hot one day could dry up the next, and that's not a recipe for success when you're after dividends.

However, there are some exceptions to this rule. Today, we'll be talking about one of them: Nike Inc (NYSE:NKE), the athletic shoe behemoth that has returned a whopping 32,690% since going public in 1980.

But while those returns are nice, today's investors should be focused on the future, and how safe Nike stock and its dividend are.

Screen Shot

Nike's latest Air Jordans. Source: Nike. 

The most important metric for investors to watch
When it comes to dividends, no metric is more important to watch than a company's free cash flow. That's because it tells you how much money a company has left over at the end of the year after paying for any capital expenditures.

It is from free cash flow that dividends are paid, and without it, dividends would dry up over night. Here's what Nike's free cash flow situation looks like since the recovery from the Great Recession began.

There are three takaways from this chart: two positive and one negative.

The first positive is the fact that Nike's dividend payout has grown every year since 2010. In fact, when combined with the effect of dividend buybacks, Nike's dividend has increased by 14% per year over that time frame.

The second positive is that the dividend is very safe. In no year did the dividend payout account for even half of the company's free cash flow. That means when times get tough, Nike can continue paying out its dividend, and over the long run, there's still a lot of room for the dividend to grow.

The negative -- which should be fairly obvious -- is that there have been wild fluctuations in free cash flow. Usually this is a bad sign, but in Nike's case, there is an important caveat. The huge fluctuations are due to the company's build up of inventory -- in this case, sports apparel and shoes.

In 2009, the company had a lot of leftover inventory, so it didn't have to spend nearly as much in 2010 on shoes and clothes -- which helped juice 2010's free cash flow. The same pattern played out in 2012 and 2013 as well, as the company reacted to -- and prepared for -- sales patterns.

So, what about Nike stock?
While there's no doubt Nike's dividend is rock solid, a look at the company's free cash flow doesn't tell you much about the stock and underlying business.

To understand what Nike's future could hold, it's important to investigate where the company is doing business. According to Forbes, Nike has the 24th most powerful brand in the world, and is in first place among apparel companies. That's important because in 2014, Nike got over half of its revenue from outside North America.

What's impressive is that Nike has been able to grow North American revenue by 16% per year since 2010 -- even though it is by far the most mature market the company operates in. China's days of heady growth seem to be coming to a halt, as revenue has stayed about the same since 2012.

It appears the real growth driver for Nike will come from emerging markets -- particularly Latin America. That division has also grown its revenues by an average 16% per year and now accounts for 15% of all Nike product revenue.

By almost any measure, Nike is a company on very solid footing. The only real knock against Nike stock would be the same one we could use for the market in general right now: It's expensive. Currently, shares are trading hands for 27 times earnings. While that's a pretty rich valuation, those simply looking to cash in on the company's dividend shouldn't let that stop them from buying in.

Otherwise, it's probably wise to initiate a starter position, then wait for better value points to add to the position in the future.

Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.