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With Major League Baseball in full swing, and the NHL and NBA seasons nearly concluded, summer is almost here. It’s that time of year again when everyone trades their winter coats and boots for shorts and swimsuits.
In that vein, it’s a good time to consider stocks that make big money from outdoor sports. Here are three dividend-paying sports stocks that capitalize on the great outdoors, right in time for their prime time of the year.
Dick’s Sporting Goods (NYSE: DKS) is the largest full-line omni-channel sporting goods retailer in the United States. Last quarter, Dick’s grew total sales by nearly 9%, to $1.6 billion. Same-store sales, which measures sales at stores open at least one year, rose 1.5%.
The traditional Dick’s Sporting Goods format is growing sales. But one factor hurting Dick’s is its Golf Galaxy stores. Golf is an area of sports that isn’t doing well right now, as many individuals – particularly young people – are turning away from the sport because of its degree of difficulty and high cost. Golf Galaxy same-store sales fell 11% last quarter.
But fortunately, Golf Galaxy is a very small part of the overall company. As of May 2, the company operated 612 Dick’s Sporting Goods stores in 46 states, and just 78 Golf Galaxy stores total.
Plus, Dick’s has a growth engine in the form of e-commerce, which is helping lift the company. E-commerce as a percentage of total sales rose to 8.5% last quarter, up 150 basis points year-over-year.
Dick’s has a 1% dividend yield.
Nike (NYSE: NKE) is one of the most popular growth stocks in the world. There is good reason for this. Over the first three quarters of the current fiscal year, Nike grew revenue and diluted earnings per share by 13% and 19%, respectively, excluding currency fluctuations.
Nike is one of the most recognizable and valuable brands in the world, and its reach keeps growing. It’s likely that it has a long road of growth ahead of it because of its continuing innovations. Last year, it rolled out the KOBE 9 Elite, its first basketball shoe with its ultra-lightweight Flyknit technology.
Another growth catalyst for Nike is the women’s apparel category. Its women’s business grew faster than its men’s segment last year, and is now a $5 billion business.
And Nike recently scored a $1 billion deal with the NBA, stealing the basketball uniform and apparel contract away from close rival Adidas (OTC: ADDYY). Nike will make uniforms for the NBA over an eight-year agreement once Adidas’s existing contract runs out in 2017. The transaction comes with a hefty price tag, but Nike will be the first apparel company to have its logo appear on all on-court uniforms.
Nike has grown its revenue and profits by rapid amounts in recent years, and has rapidly increased its dividend as well. The company grew its dividend by 15% per year over the past five years.
Foot Locker (NYSE: FL), like Dick’s Sporting Goods, is a retailer that cashes in during the summer months. Foot Locker operates more than 3,400 stores in the United States, Canada, Europe, Australia and New Zealand. It’s a tremendously well-run company which grew revenue and EPS last year by 10% and 25%, respectively.
After last quarter’s earnings, Foot Locker raised its dividend by 14%. The stock currently has a 1.6% dividend yield. It also simultaneously approved a new three-year, $1 billion share buyback program to help keep earnings growth intact. This was a 67% increase from the company’s previous share buyback plan.
With spring in the rear-view mirror and the weather heating up, it’s a good time to look at companies that reap hot profits from the summer season. Dick’s Sporting Goods, Nike and Foot Locker rake in big sales and profit from summer activities, and they share that success with shareholders through toasty dividends.
Worry-free riches
They’re owned by some of the wealthiest people on the planet. They share a few key similarities that distinguish them from 99% of equities. Even as the S&P keeps breaking record highs, they’re still crushing it. In fact, over the last ten years they’ve outpaced it by a colossal 390%. Find out more right here.