When it comes to sports there are plenty of ways for investors to get into the game. There aren't many actual teams or leagues that are publicly traded, but there's no shortage of media companies with strong sports programming assets. I prefer to take a step back from the field to find companies that are cashing in on the popularity of sports but with more upside. 

DraftKings (DKNG 7.81%) and Nike (NKE 1.72%) are two sporting plays going through entirely different situations right now. DraftKings is riding high on the growing popularity of fantasy sports and actual live sports wagering. Nike has been a steady producer for decades, but the athletic footwear maker is running through a rough patch since the pandemic and global recession grabbed the relay baton. Let's size up the two companies to decide which one is the best fit in your portfolio.

Four football fans watching a TD celebration on the flat screen TV in their living room.

Image source: Getty Images.

Swoosh there it is

Let's start with Nike. Until fiscal 2020 the iconic brand was resilient for investors. Nike cranked out positive top-line growth in 19 of the 20 previous fiscal years, and the outlier there was a marginal 0.8% decline in fiscal 2010. Last year was rough. Nike's business took a 4.4% step back in fiscal 2020, entirely the handiwork of a brutal 38% drop during the fiscal period that ended in May of last year when the pandemic sucker punched the economy and its stunned consumers. With sporting leagues at all levels suspended -- along with classrooms and social scenes going virtual -- there just wasn't a lot of demand for a new pair of Air Max sneakers. The bad spell didn't last.

Nike's business posted a small dip in revenue the following quarter, but it has turned this around in the fiscal second quarter with growth across all geographies. Analysts see a big bounce in revenue for all of fiscal 2021 off of last year's depressed results. The long-term track record will still look impressive with Nike generating top-line gains in 20 of 22 fiscal years in this stretch. 

Nike's 0.8% yield may not seem like a dinner bell for income investors, but Nike has come through with 19 consecutive years of dividend hikes. The stock isn't cheap by most valuation metrics. Even if we look out to fiscal 2022 to get past the pandemic noise we find the footwear and activewear giant trading at 36 times Wall Street's profit target. It's expensive, but like a pair of vintage Air Jordans, you have to pay up for the brand and the quality.

Betting on something bigger

DraftKings doesn't have the same Wall Street pedigree as Nike. It wasn't even public a year ago. However, DraftKings has captured the imagination of sports fans looking for a smart play on the fast-growing sports gambling market. 

DraftKings is one of the two leading companies when it comes wagering on fantasy sports. It also operates an online sportsbook, and here's where the brilliance of DraftKings' strategy starts to shine. It's been brokering deals with leagues, teams, and sports-centric broadcast networks to be the fantasy sports partner of choice. This is a foot in the door for DraftKings, using its fantasy sports hook as a way to drive traffic to its premium offerings. 

Its latest quarter was drop-dead gorgeous. Revenue soared 146%. Its user base has increased 44% over the past year to 1.5 million, and -- get this -- average revenue per player is up a scintillating 55% on top of that. The kicker here is that this is all happening with some leagues having pandemic-shortened seasons relative to where they were a year earlier.  

One knock on DraftKings is that it's no longer sneaking up on investors the way it did when it quietly hit the market at $17 in April of last year. The stock has more than quadrupled since its IPO. However, I still like it better than Nike here. DraftKings is the better buy for risk-averse investors. Nike is the more conservative pick, but I prefer to buy disruptors instead of the potentially disrupted.