After a crowded sports year, which included the Winter Olympics and the World Cup, we’re finally back to what matters — the NFL. Americans love major sporting events, but none resonates more deeply than the National Football League. With the season opener mere days away, it’s time to consider stocks to buy that benefit from the NFL.
As you may know, the NFL was once structured as a tax-exempt non-profit organization. Some people in power manipulated the perception of that status for political agendas. As a result, the league voluntarily gave up its non-profit categorization, in part to appease a budding PR situation. But for investors, it was a moot point: you can’t directly invest in the NFL.
But that doesn’t mean football-related opportunities don’t exist. With a full season ahead of us, investors should consider sports stocks to buy. Of course, that’s the most obvious play. The best part about NFL investments, so to speak, is viable avenues in multiple sectors.
Our love for football isn’t just centered on the game itself. Several ancillary activities exist around it, including food and beverage consumption, and NFL-branded product sales. Moreover, the NFL is a technology play. Consider the role of live sports streaming, and how that will impact fan viewership.
Despite some controversy in recent years, football fans eagerly anticipate a fresh start to the season. Here are the ten best stocks to buy prior to kickoff:
NFL Stocks to Buy: Nike (NKE)
When it comes to the NFL, the most direct play among sports stocks to buy is inarguably Nike (NYSE:NKE). Earlier this year, the two brands signed an eight-year deal. Under the terms of the contract, Nike will provide uniforms and apparel for all 32 teams.
Considering that football is America’s number one sport — and by a country mile — NKE scored a major coup. Unlike other sporting events, such as the English Premier League, the NFL is an all-or-nothing proposition. While Nike rivals such as Under Armour (NYSE:UA, NYSE:UAA) are making gradual inroads with individual English soccer teams, the “swoosh” takes all of the NFL, giving it massive exposure.
Not only that, Nike is one of the few companies that can consistently afford these banner deals. The company is currently sitting on over $5.2 billion in cash against $3.5 billion in debt. Plus, NKE continues to grow at an impressive rate despite being an industry stalwart.
NFL Stocks to Buy: Adidas (ADDYY)
Although no one will dethrone Nike as the prime NFL investment, you shouldn’t ignore its chief rival Adidas (OTCMKTS:ADDYY). The German apparel maker competes heavily in player endorsements, making ADDYY one of the best sports stocks to buy.
In addition, Adidas is really good at spotting talent before they take off. According to BleacherReport.com, Adidas signed “Alvin Kamara and Dak Prescott to deals before each of them earned Offensive Rookie of the Year awards.” And let’s not forget that the company has Von Miller and ultra-popular quarterback Aaron Rodgers under its wing.
Another factor boosting ADDYY stock is the underlining company’s product synergies. Adidas manufacturers the Kanye West-inspired Yeezy shoes. This confirms that nowadays, ADDYY is as much a fashion icon as it is an athletic-apparel maker. Bringing the NFL and fashion together makes perfect business sense.
Finally, I’d be remiss if I didn’t mention Adidas’ dominant presence in the other football. Yeah, we’re talking about the NFL, but soccer is a huge revenue-generator for ADDYY.
NFL Stocks to Buy: Dick’s Sporting Goods (DKS)
Dick’s Sporting Goods (NYSE:DKS) just reported disappointingly-mixed second-quarter earnings so DKS stock is a risky play. However, our own Will Healy believes this to be a buying opportunity, and I think he raises several valid arguments.
Primarily, Dick’s Q2 results weren’t woefully terrible as initial trading sentiment suggested. DKS missed its revenue target but beat its earnings estimate. More importantly, management shifted guidance higher. For retailers, investors typically look at guidance to determine whether their recovery rallies are sustainable or not.
Second, Healy points out that Dick’s has survived the e-commerce onslaught that felled other sports stocks. This is one of the factors that make DKS attractive with the NFL season opener weeks away. They’re now the only nationwide warehouse-style athletics store, putting them in prime position to sell NFL-branded jerseys and accessories.
Plus, their ability to deliver products immediately (as opposed to waiting for e-commerce shipments) is an advantage for DKS.
NFL Stocks to Buy: Hibbett Sports (HIBB)
Source: Hibbett Sports
NFL-related sports stocks to buy don’t necessarily have to feature a direct link to the league. While the highest level of football features 32 teams, only major metropolitan areas are represented. But the sport itself lives vibrantly across the country, from the biggest cities to lesser-known towns.
If you’ve ever read the book “Friday Night Lights,” or the movie and TV series inspired by it, you know that football culture runs deep in the American psyche. That bodes very well for Hibbett Sports (NASDAQ:HIBB), a smaller, local version of Dick’s. With football season kicking off, HIBB has the opportunity to sell apparel and equipment to budding college and NFL prospects.
The immediate drawback for HIBB stock is volatility. It suffered a disappointing Q2 earnings report, and Hibbett absorbed a massive slide in the markets. Still, if you’re looking for a high-risk, high-reward play among football-related sports stocks, HIBB is your ticket.
NFL Stocks to Buy: Alphabet (GOOG)
Source: Open Grid Scheduler Via Flickr
As popular as the NFL is, it’s not immune to the paradigm-shifts in TV viewership. Decades ago, consumers had only two attractive options to watch pro football: tune in on TV, or go to the game. Today, thanks to innovations such as live sports streaming, fans have no shortage of convenient options.
One of those avenues is Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Although primarily an internet investment, GOOG has dived into multiple arenas. With NFL coverage having turned into a 24/7/365 industry, their partnerships with the league offer lucrative synergies. For instance, the official NFL app is listed on Google Play, facilitating opportunities for primary and secondary sales.
Let’s also not forget the Alphabet-owned YouTube. For most casual fans, buying an NFL TV package is prohibitively expensive. But thanks to YouTube, these fans can keep up on game highlights and important news. From Alphabet’s perspective, this ramps up advertising revenues and other sales prospects.
NFL Stocks to Buy: Verizon (VZ)
Over the years, Netflix (NASDAQ:NFLX) has done incredible damage to traditional TV providers. A saving grace for this impacted sector is sports viewership. The big dogs have the resources to shell out exclusive deals with the NFL that many streaming companies lack.
That said, live sports streaming will likely cause TV providers to scramble for answers. Late last year, the NFL and Verizon (NYSE:VZ) entered a five-year deal worth approximately $2.5 billion. Verizon had a previous deal with the league. This latest one, though, allows VZ to stream games to most devices, which includes smartphones, tablets, and computers.
Moreover, the terms permit Verizon to stream NFL highlights to over-the-top (OTT) devices. This allows fans to bypass traditional TV providers. A notable downside to this arrangement is that VZ cannot live stream games to OTT devices.
Eventually, though, this limitation will change. Media viewership across all categories has changed dramatically, and the NFL must adapt. That provides an advantage to VZ, which is looking to expand its reach beyond its core telecommunications business.
NFL Stocks to Buy: Microsoft (MSFT)
Most people recognize Microsoft (NASDAQ:MSFT) as a computer and software brand. However, I can make a strong case that MSFT is one of the better NFL stocks to buy. I’ll go one step further: the league was instrumental in boosting Microsoft’s device revenues.
When rival Apple (NASDAQ:AAPL) launched the iPad, they created a tablet industry that simply didn’t exist previously. Consumer-electronic companies soon launched various copycat versions, but the iPad resonated with hearts, minds, and most importantly, wallets.
Microsoft wanted to change this dynamic with their Surface tablet, and entered into a partnership with the NFL in 2013. Featured as the exclusive tablet/PC hybrid of the NFL, millions of viewers saw players, coaches, and referees utilize the Surface.
Some PR hiccups occurred in the initial stage due to Apple’s dominant presence. However, the Surface started to catch on due to its superior practicality and durability. In doing so, MSFT accomplished the seemingly impossible: get people to make the switch from an Apple product to a competitor.
Microsoft and the NFL have at least one more season together. But thanks to the lucrative relationship, I don’t think this season will be the last.
NFL Stocks to Buy: Domino’s Pizza (DPZ)
Americans eat an astonishing amount of pizza during Super Bowl Sunday. And while pizza sales fall for regular-season NFL games, I’m sure they’re incredibly elevated compared to, say, baseball games.
This year, though, features an unusual and unexpected kink in the pizza industry. Papa John’s (NASDAQ:PZZA) was once a key partner of the NFL. But founder and former CEO John Schnatter inexplicably uttered a racist slur during a business call.
Apparently, Schnatter’s point was that KFC’s Colonel Sanders also used the slur in question, and was therefore racist. Throwing a dead man under the bus just makes the situation a lot worse.
But cynically, this is an opportunity for Domino’s Pizza (NYSE:DPZ). While Papa John’s sales are hurting from angry customers, DPZ is absolutely flying. On a year-to-date basis, DPZ is up 60%, and I’m not surprised one bit.
The company simply has great PR. While their message has changed over the years, their advertising consistently carries a human touch. Whether it’s its well-crafted humor or promoting their employees’ efforts, Domino’s knows how to reach an audience.
With Papa John’s suffering an unnecessarily stupid disaster, this is the chance for DPZ to shine even brighter.
NFL Stocks to Buy: Pepsico (PEP)
Despite its best efforts, Pepsico (NASDAQ:PEP) finds itself running in second place to soft-drinks leader Coca Cola (NYSE:KO). But one area which Pepsico pips its rival is the NFL.
Management from the beginning has understood how vitally important the NFL is. For several years, it engaged in a sponsorship bidding war with Coca Cola, and it won. In recent times, PEP has sponsored Super Bowl halftime shows, which represent critical PR victories.
Pepsico has always branded itself as the young demographic’s soft drink of choice. Sponsoring high-level NFL events, which feature relevant musical acts, goes a long way in reaching young, impressionable consumers.
Moreover, PEP isn’t just a beverage investment. The company benefits from several popular chips-and-dip brands, including Lay’s, Tostitos, and Doritos. I’m not entirely sure what consumption figures are during NFL season, but they’re likely very high.
PEP stock is currently experiencing volatility due to challenges in the soft-drink industry. Still, with a highly-anticipated NFL season around the corner, this may be a great chance to buy PEP on discount.
NFL Stocks to Buy: Anheuser Busch Inbev (BUD)
Anheuser Busch Inbev (NYSE:BUD) is a tricky investment for me. On the one hand, I don’t understand their flagship products, Budweiser and Bud Light. The former is modestly disgusting, while the latter possibly has the worst taste of anything I’ve put in my mouth.
On the other hand, Anheuser Busch has the greatest marketing team ever. Over the years, their Super Bowl advertisements have charmed, inspired, and brought grown men to tears. Recently, their commercials are uproariously funny. I mean, BUD has successfully integrated the nonsensical phrase “dilly, dilly!” to the American lexicon.
Who will ever forget BUD after that PR coup? Almost a year after its introduction, the commercial series still resonates with audiences.
Apparently, that also means plenty of people are drinking Bud Light. Bless their hearts, because I can’t get anywhere near that stuff.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.