The Mega Millions lottery prize has become one of the biggest headlines out there. The jackpot is now at a staggering $540 million, sparking a frenzy to buy up tickets despite 1-in-176 million odds.
No doubt, the winner will have a tough time spending all the cash. Even if you took your winnings as a lump sum (which means you’ll lose a significant chunk of change), you’ll still be left with $293 million after taxes.
Still, plenty of lotto winners — and for that matter, people who have earned their millions — have gone bust, wildly spending their cash with no plans to grow it.
Any lottery winner definitely could have fun playing the stock market, but with almost $300 million in cash, you could buy a whole company! A number of smaller outfits go for the low hundreds of millions, and have decent enough prospects that they could end up being worth that enormous check.
Here’s three publicly traded companies you might consider buying if you hit the Mega Millions jackpot:
Collectors Universe ($132 Million)
Collectors Universe (NASDAQ:CLCT) provides authentication and grading services for collectors of high-value items, like coins, trading cards, autographs and stamps. CLCT has been a top player in the market since the 1980s and has made some key acquisitions along the way.
In the latest quarter, Collectors Universe generated $11.4 million in revenues and posted income from operations of $1.1 million.
The company also pays a hefty annual dividend of 7.9%, which would come to about $10.4 million per year if you held its whole pile of stock.
Big 5 Sporting Goods ($171 Million)
Big 5 Sporting Goods (NASDAQ:BGFV) would be a good choice for a sports nut.
Founded 57 years ago, the company operates 406 stores across 12 states. Each location is about 11,000 square feet and offers a wide mix of merchandise, such as equipment for fitness, fishing, tennis, golf, snowboarding and roller sports. Like most of the other sporting goods retailers, its offerings include products made by Nike (NYSE:NKE), Wilson and Under Armour (NYSE:UA).
The management team has had a long history of discipline and strong execution, and in 2011, Big 5 had revenues of $902.1 million and operating income of $19.2 million. And its 3.7% dividend yield isn’t anything to sneeze at, either.
West Bancorporation ($174 Million)
Rich people put their money in a bank.
Super-rich people can BUY a bank.
One possibility: sleepy West Bancorp (NASDAQ:WTBA), which operates in Iowa. The firm has been around since 1893 and is headquartered in West Des Moines.
In the latest quarter, West Bank reported net income of $3.7 million, and the bank has shown improvement in its loan pipeline as the U.S. economy continues to recover. It too sports a nice dividend, with WTBA yielding around 3.2%.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
