Kick Off the NFL Season with These 3 Hot Stocks (ZBRA, VAC, PZZA)

Brand recognition is the name of the game for these fall stock plays

National Football League (NFL) corporate partnerships include a category of exclusivity, which are commonly observed by the consumer with a tag line like: “The Official Insert Industry Here” of the NFL. Companies leverage their sponsorship with the use of league marks for advertising and promotional purposes. This can include signage, media exposure, print and TV ads.

Last season the NFL had 32 league-wide category sponsors that benefitted from brand recognition in partnership with the NFL. Publicly traded companies like PepsiCo, Inc. (PEP), Visa Inc (V) and Procter & Gamble Co (PG) have all been sponsors for many years and have seen the benefits of one of the fastest growing sports around the globe.

According to IEF research, sponsorship revenue for the NFL rose 4.4% to $1.2 billion last season.  I wanted to review a few companies that are paying up for this sponsorship and might benefit during the upcoming season.

Below I list three ways to score with top-ranked stocks that are either a Zacks Rank #1 or #2 and have a current sponsorship deal in place with the NFL.

“The Touchdown”: Marriott Vacations Worldwide Corp (VAC)

Marriott Vacations Worldwide Corp (VAC) is a Zacks Rank #1 (Strong Buy) and “The Official Hotel” of the NFL. The Orlando based company is a developer, marketer, seller and manager of vacation ownership resorts and vacation club, destination club and exchange programs, principally under the Marriott and Ritz-Carlton brands and trademarks.

A sponsor since 2011, Marriot found success last year during the Super Bowl with a Marriott Rewards “50 to 50” sweepstakes. The contest received more than 250,000 entries and over 50 million social media impressions. In addition, Marriot has teamed up with NFL network’s Rich Eisen to promote the Courtyard name. Look for the company to continue to leverage the NFL partnership this season to grow their brand with fans.

Marriot has a market cap of $2 Billion and a forward PE of 17. The stock sports Style Score of “C” in Value and pays a 1.56% dividend.

In late July, the company reported Q2 $1.08 versus the $1.03 expected, with revenue missing expectations by $14 million. They went on to adjust fiscal year 2016 to $4.43-4.78 verse the $4.48 expected. Estimates over the last 60 days have reflected the adjustment moving 3.7% higher for 2016 and 8.6% higher for 2017.

CEO Stephen Weisz had some comments during the call about the year ahead: “Contract sales growth gained momentum as we moved through the second half of the quarter. Additionally, tour activations for the second half of 2016 are substantially ahead of this time last year, and four of our six new sales centers are open and gaining momentum, giving us confidence that we will achieve our 2016 goals and are well positioned for solid growth in the years to come.”

“The Safety”: Papa John’s Int’l, Inc. (PZZA)

Papa John’s Int’l, Inc. (PZZA) is a Zacks Rank #2 (Buy) that operates & franchises pizza delivery and carry-out restaurants under the trademark Papa John’s. The Louisville based company was founded in 1985 and employs over 22,000.

Papa John’s recently renewed its multiyear partnership deal as “The Official Pizza Sponsor” of the NFL and Super Bowl. As a sponsor, the company will use NFL logos and trademarks in its advertising and marketing campaigns across large NFL events. The company will continue to leverage stars such as JJ Watt and Peyton Manning across its TV, digital and social marketing channels. In addition, the company is the preferred pizza of 23 NFL clubs.

Papa John’s is valued at $2.75 Billion and has a forward PE of 30. The stock sports a Zacks Style Score of “A” in Growth and pays a 1.07% dividend.

The company reported earnings earlier this month with a 12.96% beat. In addition, the Papa John’s raised fiscal year 2016 guidance, which has caused estimates to be revised 1.6% higher over the last 30 days. The stock is currently trading only 7% from all-time highs and will look to take them out when the company reports EPS on November 1st.

 

“The Extra Point”: Zebra Technologies Corp. (ZBRA)

Zebra Technologies Corp. (ZBRA) is a Zacks Rank #1 (Strong Buy) that designs, manufactures and supports a broad range of direct thermal and thermal transfer bar code label printers, receipt printers, instant-issuance plastic card printers and secure identification printing systems, related accessories, and support software. The company was founded in 1969 and is headquartered in Lincolnshire, IL, where it employs 7,000.

Zebra is “The Official On-Field Player-Tracking Provider” of the NFL. Zebra’s RFID system utilizes tags in shoulder pads to track player movement during NFL games.  This data allows the NFL to track athletes speed, distance traveled, and acceleration in real time. Not only does this data help the team and athlete, but it is used to enhance the TV broadcast experience for the audience.

Zebra has a market cap of $4 Billion and a forward PE of 14. The stock sports Style Scores of “C” in Value and has an expected 3-5 year EPS growth rate of 9%.

The stock has had a rough ride after topping out last year at $120, falling more than 50%. However, after a big 29 cent EPS beat, the stock has now rallied 50% from its June lows. Estimates revisions higher are the reason for the jump in the stock price, as fiscal year 2016 is up 7.8% over the last month, while 2017 has seen a 4.9% bump.

Are You Ready for Some Football and Profits?

The opening night kickoff will bring back the feeling of the fall season and the end of the third quarter. The brand recognition that the NFL brings to its sponsors will help enhance Q3 and Q4 EPS numbers. Keep an eye on the Zacks Rank and revisions in earnings estimates for clues into who is winning and losing this season.

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ZEBRA TECH CL A (ZBRA): Free Stock Analysis Report

MARRIOT VAC WW (VAC): Free Stock Analysis Report

VISA INC-A (V): Free Stock Analysis Report

PAPA JOHNS INTL (PZZA): Free Stock Analysis Report

PROCTER & GAMBL (PG): Free Stock Analysis Report

PEPSICO INC (PEP): Free Stock Analysis Report

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