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Why Invest in Sin Stocks?

By Edited May 12, 2016 0 0

What is investing in Sin Stocks? Sin stocks are companies that profit off the misery of others, or the destruction of nature. For each person, there is a different view of what is a sin stock, based on how they were raised, or the issues that they consider sinful. There are socially responsible mutual funds and ETF's that seek out only stocks that can be bought with a clean conscience.

 Stock investing is about more than ideology; it is about making money. And some of the best performing stocks are sin stocks. The primary categories of sin stocks that almost everyone agrees with are, tobacco, alcohol, and pornography. A few other categories, of questionably moral stocks include defense contractors, gun manufacturers, oil companies, war rebuilders, and companies that exploit the environment like miners, and large agricultural businesses.

 With the exception of pornography stocks each of those sectors has done really well over the long term. Pornography stocks are a special case. There have been large changes in how content is viewed over the last few years, with most pornography being viewed on the Internet, rather than with traditional magazines and VHS Tapes/DVD. The few stocks in that sector that are still traded are seeking to go private or are near bankruptcy, so I would not recommend that sector.

 Tobacco Stocks:

Tobacco however is still thriving. Some of the companies have paid massive fines, and are obligated to pay the states on a yearly basis, however the revenues from these firms keep growing. Companies like Altria Group (MO), Phillip Morris International (PM), Britsh Tobaco (BTI), Lorrilard group (LO) these are fantastic dividend paying stocks that have a tendency to raise their dividends each year. Ex-US companies are even better performers due to them selling cigarettes in less litigious markets. BTI and PM have great potential over the long term, and pay out fantastic dividends year in and year out.

Alcohol Stocks: 

Alcohol is also a fantastic sector. Even in hard times people drink alcohol. For some, it may even be when they get started. Companies like Diageo PLC (DEO) which makes Kettel One, Crown Royal, Jose Cuervo, along with Guiness beers and many other alcoholic beverages is a stand-out investment. It pays a fantastic dividend, and has stellar earnings. Anheuser-Busch InBev (BUD) is another fantastic company! The company was founded in 1366, so it has stood the test of time, it also recently purchased the colossal Anheuser-Busch company, the maker of Budweiser. It pays a small dividend, but has incredible potential to boost that dividend dramatically over time. Boston Beer Company (SAM) is another company that has the potential to increase in size, and be a great investment. Boston Beer Company is the maker of Samuel Adams.

 Gun Stocks:

Gun Stocks include Smith and Wesson Holdings (SWHC) and Ruger (RGR). Of the two, Ruger is a better run company, with good earnings, and a dividend. Gun shares tend to be somewhat volatile riding on news stories, they are not the best investments as they are not an items like cigarettes and alcohol that can are consumed and need to be replenished frequently. Olin Corporation (OLN) manufactures chemicals, but also makes Winchester ammunition. It is a very well run company, and has a nice consistent quarterly dividends.

War Contractors:

War Rebuilding stocks do really well when the country is at war, and needs to hire contractors to come and rebuild along with provide necessary services during the war. Two prominent companies in this field include Halliburton (HAL) and Fluor Corporation (FLR). These companies have performed really well during the Iraq war.

 Defense Contractors:

Defense Contractors are another field that does well during times of war. Three prominent companies in this sector include Boeing Co. (BA), Northrop Grumman Corporation (NOC) and Lockheed Martin Corporation (LMT). All three of these are great performers. Boeing is slightly more diversified by being involved in commercial aircraft production, but they are all good stocks with great dividends.

They may not be as glamorous stocks, in fact they may be involved in less than desirable businesses, but sin stocks are a great way to make money investing. With their typically great dividend yields these socially irresponsible investments are some of the best retirement stocks.  



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