After a long hiatus, professional sports are almost back! Two of the major sports leagues resume next week, with professional hockey and basketball re-starting. Naturally, many of us (including myself) are excited to see the action resume.
However, as investors, there are also some potential opportunities that the return of professional sports presents. These are the three stocks I’m keeping my eye on. If you have an extra $1,000 to invest, I would keep your eye on these three stocks as well.
BCE Inc. (TSX:BCE)(NYSE:BCE) is one company that stands to benefit significantly from the return of professional sports. BCE owns a stake in Maple Leafs Sports & Entertainment (MLSE), which owns the Toronto Maple Leafs and Toronto Raptors, among other Toronto sports franchises.
In addition, BCE owns the major TV sports network TSN, which is the largest specialty TV network in Canada. These two assets stand to benefit significantly from the return of sports.
BCE has been heavily involved in media, primarily via its Bell Media division, for a long time. Unfortunately, this segment has never been as challenged as in 2020 with the pausing of professional sports, as well as the suspension of television and film production.
However, BCE is still a relatively low-risk stock because its primary business is telecommunications. The telecommunications business provides significant stability in terms of revenue and cash flow.
In summary, BCE stands to benefit significantly from the resumption of professional sports and is a relatively safe pick for those looking to benefit from the return of sports without taking too big of a risk.
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Boston Pizza Royalties Income Fund (TSX:BPF-UN) (“BPIF”) is another interesting opportunity arising from the resumption of professional sports. While BPIF does not operate the Boston Pizza restaurants, it receives a royalty from the sales of certain Boston Pizza locations. This means that investors have direct exposure to Boston Pizza with BPIF.
Boston Pizza is one of the leading chains of sports-themed restaurants in Canada. There are over 350 Boston Pizza restaurants across Canada and the company has a long history, dating back to 1964. Boston Pizza, due to its focus on the dine-in and sports markets, has been hit hard because of the pandemic.
BPIF temporarily suspended monthly distributions in March as it closed restaurants across the country. As sports resume and restaurants gradually reopen, Boston Pizza should benefit significantly. Furthermore, upon resuming its dividend payments, BPIF should see a pop in its stock price, much like A&W Revenue Royalties Income Fund did when it recently announced the resumption of its dividend.
While operating a restaurant in this environment is a high-risk proposition due to the capital requirements, BPIF is not nearly as risky as owning and operating restaurants directly. While BPIF is certainly a higher risk than BCE, for example, it also provides the opportunity for significantly more share price appreciation if things go well for it.
Rogers Communications Inc. (TSX:RCI-B)(NYSE:RCI) is in a similar position as BCE. Rogers is a co-owner, along with BCE, in MLSE. Additionally, Rogers is the sole owner of the Toronto Blue Jays. Rogers also has its own TV sports network called Sportsnet.
Due to these heavy investments in sports assets, Rogers has suffered in a very similar fashion to BCE as a result of the pausing of professional sports.
However, also like BCE, Rogers has a telecommunications business that provides it with a sturdy source of revenue and free cash flow. Rogers owns the country’s leading cable company, as well as one of the largest mobile networks in Canada. This means that Rogers is similarly a low risk bet on the resumption of professional sports.
Rogers is slightly more invested in sports than BCE, simply because of its ownership of the Toronto Blue Jays. Therefore, those who want heavier exposure to the sports sector, within the telecom space, should consider Rogers.
Sports are almost back! Before you sit down and enjoy the game, make sure you prepare your portfolio to score big as well.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV. Fool contributor Kyle Walton has no position in the companies mentioned.