If you’re looking for somewhere to invest, sports stocks are often a good option. Take good to mean “lucrative,” of course.
Sport is accessible to so many and so popular, that it’s hard not to love it, and this popularity allows the companies that operate in the sports industry to do well and become attractive investments. Below is a look at some of the best sporting stocks you can invest in if you’re looking to expand your portfolio.
Dicks Sporting Goods
When it comes to sporting goods, Dick’s Sporting Goods is the industry leader without question. An average store covers about 50,000 square feet, which is much larger than an average sporting goods store. So the fact you’ll find Dick’s stores in fewer locations doesn’t matter so much to the brand. Still, there are plenty of them. The company finished with 854 stores. That includes Golf Galaxy and Field & Stream locations.
A plague of bankruptcies has helped the company further establish its position in the market. Meanwhile, the company has been investing in ecommerce and in-store experiential features such as golf ball tracking technology and basketball simulators.
Draft Kings
If you think investing in the stock of a US sportsbook could be the thing to do, DraftKings could be the company to make your investment portfolio smile. Whereas some businesses require billions of pounds to develop because of buildings and other tangible assets they create, not to mention the maintenance they require, Draft Kings is asset-light. The mobile gaming service is packed with potential for higher operating profit margins and the fact you can access the service online means it can receive a lot more visitors than a physical location could.
Most importantly, the company has witnessed spectacular growth. From 2017 to 2020, revenue ballooned from $192 million to $615 million. The company has expanded into several states, including Wyoming, Arizona and Connecticut.
Foot Locker
Foot Locker is an absolutely huge sports footwear brand, the biggest in the US in fact, and has at least 3,000 stores under the name of Foot Locker alone. Then there are the company’s Footaction, Champs Sports and Sidestep locations.
Sales of Nike goods are especially high. Foot Locker has a special relationship with the brand, but beware that this is a double-edged sword. Although it receives unique product releases and joins forces with Nike on in-store retail experiences, the relationship places Foot Locker heavily at the mercy of Nike, as the company is relying on a single, incredibly powerful vendor.
Callaway Golf
The events of the last couple of years have made golf an attractive past-time for a lot more people than before, due to the possibility to get out and play safely on the green. The jump in interest has served Callaway Golf well, given that so many of its sales are of golf clubs.
In October 2020, the company announced its intention to acquire Topgolf, which combines restaurant service and virtual golfing. The company completed this acquisition in the first quarter of 2021 and, by doing so, has created a unique revenue stream that can foster loyalty towards Callaway products. Topgolf also introduces new players to the game, increasing sales of golf equipment and related products.
Hibbett Sports
Typically, you’ll find Hibbett Sports stores, which average around 6,000 feet, in shopping malls on main roads, mostly in the south of the country. Hibbett has adopted the clever strategy of catering to an underserved market, which it does because it faces less competition and can also make the most of cheaper real estate.
Not so long ago, the company increased its share buyback from $300 million to $800 million. This would enable it to buy back more than half of its shares outstanding. Earnings per share hit record levels in 2021, with the company posting results of $5 per share in the first quarter. When a company buys back its shares, this is a good sign because the company also feels the shares are a good investment. Doing so can also ease the tax burden on shareholders.
Acushnet Holdings
As the parent company of Titleist, the golf ball maker, and FootJoy, the golf shoe brand, Acushnet Holdings has immense brand strength. Acushnet likes to concentrate on dedicated practitioners of gold because these people are the most consistent purchases of golf products and are also more likely to buy premium golf products.
The company’s performance is very closely linked to the aggregate rounds of golf played, seeing as golf balls are a consumable product. But it’s now planning to grow by introducing new products. Innovation in golf balls, clubs and footwear is part of its aims.
Given the popularity of sports, sports stocks are an appealing investment and could generate a lot of income when you invest in the right ones. The stocks above are highly attractive and are well worth considering when it comes to expanding your portfolio.