The most obvious Caitlin Clark stocks are Nike (NYSE:NKE) and PepsiCo (NASDAQ:PEP). The NCAA basketball phenom already has deals with the two public companies.
Although the soon-to-be WNBA star failed to win the NCAA Tournament for the second year in a row, she’s a marketer’s dream, so there will be no shortage of powerful companies looking to sign her to long-term sponsorships. She’ll undoubtedly make millions in the next few years.
However, as she said at the Iowa Hawkeye’s celebration at their home arena in Iowa City, Iowa is her home.
“I would say you’ve all inspired me as much as I inspired you,” Clark said to the approximately 8,000 fans at Iowa’s Carver-Hawkeye Arena. “And you allowed me to live out my dream every single day, and for that, I’m very thankful. It’s been very special, and this place will always be home to me,” The Associated Press reported.
Given her affinity for Iowa, I think it’s only fitting that these three Iowa-based companies sign her up.
Principal Financial Group (PFG)
Principal Financial Group (NYSE:PFG) is based in Des Moines, Iowa, the hometown of Caitlin Clark.
The company provides retirement, asset management, and insurance products and services worldwide to businesses, individuals, and institutional clients. As of Dec. 31, 2023, it had $1.58 billion in assets under administration and $694.5 billion under management.
Principal has three reportable segments: Retirement and Income Solutions (50% of revenue), Principal Asset Management (19%), and Benefits and Protection (31%).
The company expects to grow its earnings per share by 9-12% in 2024 to $7.65, with 75-85% of net earnings converted to free cash flow. In 2023, it used free cash flow to return $1.3 billion to shareholders, including repurchasing 9.1 million shares at an average price of $76.92 and $60o million in dividends from an annual payout of $2.60.
While it could have done a better job buying back its shares, investors can be sure it’s shareholder-friendly.
One of the more interesting developments in 2024 is the announcement that its Principal Alternative Credit business, which lends between $25 million and $200 million per transaction to middle market companies earning at least $5 million EBITDA (earnings before interest, taxes, depreciation and amortization), reached $2 billion in borrower commitment.
With Clark set to earn significant amounts from her WNBA contract and non-playing endorsements, she’d be the perfect Iowan to represent the company nationwide.
Casey’s General Stores (CASY)
Casey’s General Stores (NASDAQ:CASY) is based in Ankeny, Iowa, a suburb north of Des Moines.
Casey’s operates over 2,600 convenience stores and gas stations in 17 Midwestern states. Known for opening locations in smaller towns, 50% of its stores are in towns of 5,000 or less. Yet, it generated $3.33 billion in revenue in Q3 2024 with $114.5 million in pre-tax income. In the nine months ended Jan. 31, the company opened 118 net new stores, bringing its total to 2,639.
As the company points out in its Q3 2024 presentation, the convenience store industry remains fragmented, providing ongoing roll-up opportunities. In the past three years, Casey’s has acquired 259 stores. With approximately 63% of the convenience stores in the U.S. owned by operators with between one and 10 locations, there’s plenty of work left for it to do when it comes to consolidation.
Casey’s continues to grow its food business. In Q4 2024, its Prepared Food & Dispensed Beverage business increased by 11.4% to $349.1 million due to a 7.5% increase in same-store sales and a 3.9% increase related to store growth.
I could see the company leveraging its excellent private label business to launch CC’s, Caitlin Clark’s favorite products she takes with her on the road to WNBA games.
It’s a no-brainer.
Workiva (WK)
Workiva (NYSE:WK) is based in Ames, Iowa, the home of Clark’s biggest rival, the Iowa State Cyclones.
“Workiva offers the only unified SaaS platform that brings customers’ financial reporting, Environmental, Social, and Governance, and Governance, Risk, and Compliance together in a controlled, secure, audit-ready platform,” states its investor relations website.
Although the B2B business might be less exciting than Nike’s, its platform is something most businesses could use.
Interestingly, all three companies I’ve mentioned have good businesses, but their stocks have underperformed over the past five years. Workiva’s stock is up 50.0%, about 24 percentage points less than the S&P 500. All three of them could use a little boost from Caitlin Clark’s well-earned reputation as a leader.
Workiva’s Q4 2023 presentation says its total addressable market is $12 billion in North America and $25 billion worldwide. Its revenue in 2023 was $630 million, or about 2.5% of its TAM, so it has plenty of room to grow.
In 2024, it expects to grow revenue to $720 million (14%) at the midpoint of its guidance. It won’t make money on a GAAP basis this year—it will lose $1.25 a share with a non-GAAP profit of $0.60—but if it keeps adding customers as it did in 2023 (it had 311 customers who spent more than $300,000, 32% higher over 2022), it will get to GAAP profitability soon enough.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.