Donald Trump likes many activities -- amassing power, building skyscrapers and riding in blinged-out jets.
But The Donald's love of golf is the one passion that could actually make you money during a Trump presidency. Trump owns 18 golf courses worldwide -- courses that would get outsized attention across news media and social media every time the prospective president, and noted golf ambassador, shows up for a round. And we are talking true showpiece properties, such as Doral in Florida, which had its day in the sun on Sunday with the likes of golf heavyweights Rory Mcllroy, Bubba Watson and Phil Mickelson duking it out at the Cadillac Championship. And more big tournaments that drive interest in golf are waiting in the wings.
Trump National Bedminster in New Jersey is the site of the U.S. Women's Open in 2017. The Trump National Golf Club in Potomac Falls, Va. will host the Senior PGA Championship next year. With these huge tourneys in place, and the lightening rod Trump likely to play more rounds of golf than President Obama at his courses during a four-year term, the game of golf would be front and center on a global scale.
In turn, this could drive more rounds of golf played around the world and stronger sales of equipment. Very likely to benefit from this renewed enthusiasm would be golf equipment company Callaway Golf (ELY), which had a nice rebound in 2015 amid improved products and tighter management of its manufacturing processes. In the U.S., Callaway's revenues grew nearly 6% last year, excluding the impact of the strong dollar. For the year, gross profit margins surged 510 basis points from the prior year.
The company says its market share in dollar terms was 21.1% for the year, up 260 basis points, or 14% year over year. Callaway notes that this was its highest market share since 2003, and represented a 52% improvement over the last three years. According to research outfit Golf Datatech, Callaway held the number one share of fairway woods, hybrids, irons, putters and total clubs in 2015.
In 2016, the company has several new and notable product innovations in the market, including the XR 16 driver, which was developed in partnership with Boeing (BA), and the return of the legendary Big Bertha driver. It also doesn't hurt that Callaway sponsors Mickelson, who, at age 46, remains at the top of the leaderboard almost each weekend.
As icing on the cake: Callaway's relatively new leadership has worked diligently to pay down debt and clean up the balance sheet.
Now what if for some reason Trump's campaign goes in the toilet this summer and fall due to gaffes in debates with Hillary Clinton? Well, there are several powerful reasons to still be intrigued by Callaway.
Golf in the Olympics: Golf will be starring in August at the 2016 Summer Olympics in Rio de Janeiro, Brazil. It will be the first time golf has been played at the Olympics since 1904. Men's and women's events will be held. To have golf on this type of world stage is likely to spur golf equipment sales.
The golf industry has stabilized: Post Great Recession, the golf industry really went into the tank. People didn't have the money to pay $100 for a round. Poorly situated golf courses that were built at the top of the debt boom folded. Tiger Woods' decline reduced interest in the sport.
But the golf business seemed to finally turn the corner in 2015. According to the National Golf Federation, total U.S. rounds were up 1.8% last year compared with 2014, the first increase since 2012. Many course operators told the NGF that an improving economy helped boost the number of rounds played. Golf rounds played are a key driver of equipment sales.
Golf viewership is rising: Thanks to a new crop of interesting golf superstars, such as McIlroy, Jordan Spieth and Rickie Fowler, golf viewership was up nicely in 2015, which certainly bodes well for equipment sales. In 2015, Golf Channel matched its highest-rated year ever for the second consecutive year, according to data compiled by Nielsen. Additionally, viewership growth was driven in part by millennials, with impressions for persons aged 25-34 advancing 50% in the total day category, 17% in primetime and 22% for PGA Tour coverage.