by Marc Bastow | September 4, 2013 12:04 pm
Labor Day is over. Are you ready for some NFL football?
Of course you are … and so are those advertisers who are locked into the league for sizeable portions of their revenues.
You can take your pick — from automakers to brewers and just about any other company in between, we’re about to get hit by a deluge of product-pushes on TV, billboards and even uniforms every Sunday and Monday (and, crap, even Thursday) for the next few months.
And what about Joe fan? Well, while fans across the league can get emotionally invested in their favorite teams and even financially invested through fantasy football and pick ’em wagers, there’s something to be said for a real investment in some of the biggest brands behind America’s biggest professional sports league.
So, as you get ready for tomorrow night’s opener between the Ravens and Broncos, here are three companies vying for a roster spot in your portfolio:
“Wings. Beer. Sports.” That about sums it up for Buffalo Wild Wings (BWLD), which started in 1982 as a single location in Ohio and now is a sprawling operation totaling more than 900 restaurants across North America.
While the menu is a bit more diverse than it was in 1982, wings — and 20 different sauces — still carry the menu, as do BWLD’s increasingly sprawling beer taps. Throw in Buffalo Wild Wings’ ample spread of big-screen TVs, and it’s clear why the wing-slinger is one of the nation’s most popular gameday spots.
Buffalo Wild Wings’ revenues have soared 85% between 2009 ($538 million) and last year’s break through the billion-dollar mark ($1.04 billion, to be exact). Net income has risen steadily, too, from $30.6 million to $57.3 million in the same time frame. BWLD’s most recent quarterly results were plenty encouraging, too, with sales up 28% year-over-year and profits up a whopping 41%.
The stock has nearly tripled in the past five years and is up 45% for the year-to-date. And while that P/E of 33 might feel daunting, there’s plenty of reason to be bullish for the long-term, according to Motley Fool’s Steve Symington and our own Kyle Woodley, the latter of whom wrote about BWLD in February but still is personally long the stock.
In 2009, satellite television provider DirecTV (DTV) signed a $1 billion-a-year contract through the end of the 2014 season for exclusive rights to broadcast NFL games not available to fans through local affiliates.
DTV now provides that access to the package contents through mobile devices, as a perk on JetBlue Airlines (JBLU) as of 2010, and it’s now available in South America and Canada.
Hell, I watched a game last year on my tablet in a London hotel.
It is, at least until next year, a DTV money-maker: NFL Sunday Ticket generates around $450 million per year in subscriber fees through its 2 million subscribers, plus additional monies through the mobile applications offering. More importantly, the package is an entry for potential subscribers of the service’s regular programming lineup.
DTV’s stock price has doubled since inking the deal; meanwhile, revenues have grown more than 37% since fiscal 2009, and net income has soared more than 200% to nearly $3 billion.
However, DirecTV might be hurting in the long-term, as it will have to pony up big bucks to renew its NFL deal beyond 2014 — and others are in the mix to bid, including surprise entry Google (GOOG).
Still, DTV has at least a little juice left, and it’s fairly valued at 12 times earnings.
Nike (NKE) is known to just about every sports fan on the planet, and now one of the biggest faces on the NFL brand.
Last year, Nike inked an exclusive five-year deal with the NFL for $1.1 billion to provide uniforms for all 32 NFL teams. Initial estimates on a potential sales boost ran to about $500 million per year, or about 2% of its $25 billion in annual sales.
Nike’s North American apparel business alone clocked in at $3 billion last year, growing 22% between fiscal 2013 and 2012, and the company noted its licensing agreement as one of the growth drivers.
Still, while the NFL is big for exposure, it’s still just one part of the Nike franchise, which includes gear and accessories for virtually every sport out there on a very global scale.
Meanwhile, Nike’s stock is up 25% year-to-date and split 2-for-1 last year. NKE’s dividend isn’t anything to scream about — it yields just 1.3% — but the company has increased its quarterly payout for 11 consecutive years.
Nike is established, and with its feet firmly planted in the technology necessary to advance sporting apparel, it should be just fine for the long haul.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he does not hold a position in any of the aforementioned securities.
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