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What Are Sin Stocks and Why Should We Care About Them?

December 1
7:34 AM 2017

What Are Sin Stocks and Why Should We Care About Them?

People can invest in a wide variety of industries, from automotive and agribusiness to services, tourism, medicine, and fashion, by purchasing stocks of companies active in these areas. But there is a category of stocks that people usually don't talk about - they are called "sin stocks", and they are an interesting phenomenon. On one hand, they are companies involved in activities that are usually frowned upon. On the other, they are pretty sound investments, attractive to investors by nature.

What are sin stocks?

Sin stocks are, basically, stocks in companies that are active in an area that's not very positively seen by society, most of the times ones that exploit human weaknesses and frailties or deal in addictive goods. Sin stocks include businesses like alcohol, tobacco, weapons manufacturers, the military, and gambling. Some investors avoid these stocks because of their nature, despite the fact that they usually come with constant growth and solid revenues. Sin stocks are usually undervalued because of their negative image, shunned by institutional investors and analysts. This makes them attractive for some investors, especially since they have great long-term records.


One of the investments universally considered to be "sinful" is in gambling companies. Gambling is a perfectly acceptable business in some countries and completely banned (or restricted to special regions) in others. It is also done online - there are quite a few major online gambling groups surrounded by smaller companies like the All Jackpots casino. Most of the major groups - like Paddy Power Betfair, William Hill, Bwin, and 888 - are publicly traded businesses, while small companies like the All Jackpots are private. You won't be able to invest in All Jackpots online casino games but you're more than welcome to play them and hope to win.

Among the most productive gambling-related stocks, you'll find casino groups like Wynn Resorts (NASDAQ: WYNN) or Las Vegas Sands (NYSE: LVS), online gambling and betting groups like Paddy Power Betfair (LON: PPB) and William Hill (LON: WMH), and casino technology providers like IGT (NYSE: IGT) and NetEnt (STO: NET-B).

Addictive consumer products

Alcohol and tobacco are part of our culture - and will stay so for a long time. These are considered completely legit by many and completely sinful by others. Leading distillers routinely post double-digit profits, which means that investing in them is a good bet in the long run.

According to the Motley Fool, Brown-Forman (NYSE: BF-A) (NYSE: BF-B), Constellation Brands (NYSE: STZ), and Diageo (NYSE: DEO) are the best alcohol stocks one should invest this year. Brown-Forman owns brands like Jack Daniels, Canadian Mist, Woodford Reserve, and many others, Constellation Brands owns Corona Extra, among others, and Diageo owns brands like Guinness, Johnny Walker, J&B, and such.

On the tobacco front, there are also many stocks that deserve attention, like Altria (NYSE: MO) that owns Philip Morris brands, Universal Corporation (NYSE: UVV), the world's leading tobacco merchants, and Vector Group (NYSE: VGR), that has an incredible variety of tobacco product brands under its umbrella.

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