Whenever I write about this topic, I get more negative feedback than any other.
And to be honest, it may not be right for you, either.
But at Intelligent Income Daily, our goal is to identify opportunities in the market that generate safe, secure, and reliably growing streams of passive income.
And a portfolio built of these types of picks – from all corners of the market – can enhance your total returns, so you can sleep well at night.
So as analysts, we wouldn’t be doing our job if we didn’t share our research on a sector of the market that has grown year after year… even if some investors wouldn’t touch it.
I’m talking about so-called “sin” stocks.
As I’ll show you today, these companies have been around for decades… and will likely continue churning out revenues and dividends for years to come.
So regardless of where you may stand on the subject (I should know, I grew up going to Sunday school every week in the Bible belt), you’ve got to admit…
This trend has minted billions. And for those who are interested, it can present a chance to get a piece of those profits.
That’s why today, I’ll present you with the facts. And give you one of my favorite recommendations to profit from this unstoppable trend.
Decades of Unstoppable Growth
It’s true that sin stocks include many companies people love to hate.
They include industries like gaming (casinos), alcohol, tobacco, marijuana, firearms, and defense stocks.
Even consumer staple companies that sell highly processed or sugary food/beverages can count.
But there’s a simple reason they’ve stood the test of time: People will spend money on these products, regardless of the strength of the macro economy.
And when people are stressed out, they’ll turn even more toward indulgences and comforts. Whether that’s a pack of cigarettes, a cold beer, or a chocolate bar.
That’s why sin stocks are often considered to be recession-resistant and top investments during bear markets.
Take cigarette companies, for example. You’re going to have a difficult time finding companies with more reliable earnings-per-share growth histories than tobacco stocks.
Altria (MO) is one of the world’s largest producers of tobacco related products. And it’s grown earnings-per-share every year for 19 consecutive years.
Plus, the company is on a 53-year dividend increase streak, and it has a 5-year dividend growth rate of 7.18%. Altria shares currently yield 8.36%. That means this company has been crushing it through every market since the early 1970s.
Along the same line, whether we’re talking about beer, wine, or spirits, demand for booze continues to rise across the globe. And there are a handful of companies that own well diversified product portfolios that benefit from shifting consumer trends, regardless of where tastes go in the short-term.
In the consumer staples space, some of the largest and best-known brand names, such as Coca-Cola, PepsiCo, and Hershey, have offered some of the best long-term returns… all on the back of sugary sales during the craziest times in the market.
In 2020, Hershey’s earnings-per-share grew by 9% during the COVID-19 crash.
Brown-Forman, a liquor maker, saw its earnings-per-share rise during 2008 and 2009 during the Great Financial Crisis. While people were worried about banks failing, they didn’t stop buying their bourbon. Brown-Forman is on a 38-year dividend streak.
My Favorite Company to Profit from This Trend
Now, there are a few exchange-traded funds (ETFs) that track investments like these. But none we like enough to recommend you take a closer at them.
(Remember, with ETFs, you get a whole basket of picks – the good, the bad, and the ugly. So it’s important to know and like what you’re getting involved with.)
Instead, I’ll share the name of one of my favorite real estate investment trusts (REITs) to profit from this trend.
I’ve written about VICI Properties (VICI) quite a bit here at the Intelligent Income Daily. It owns about half of the Vegas strip as well as many other gaming resorts across the country.
Why do I like VICI so much?
In short, the house always wins. And when it comes to tenants, it doesn’t get much better than casino operators due to the reliable nature of their cash flows.
Remember, during the COVID-19 pandemic, VICI collected 100% of its rents… a feat unheard of throughout the rest of the REIT sector.
For those who invested in VICI when I recommended it in October 2022, our total return is now 8.9% with a dividend yield of 4.7% And it’s still climbing.
And it is still currently trading under our buy-up-to-price so if you are looking for an excellent sin stock of your own, consider looking into VICI today.
VICI also isn’t the only opportunity my team and I see in this “untouchable” sector. We’ve recommended several other sin stocks in our actively managed portfolios for paid readers of Intelligent Income Investor.
These have provided us with 43.1% and 46.3% total returns in just three years. And they currently offer 8.3% and 2.4% dividend yields.
That’s what we do at Intelligent Income Investor: Provide you with the best picks that will help you profit even in today’s volatile market conditions.
All so you can achieve reliable growth and stable income and sleep well at night (SWAN).
So if you haven’t already, check out Intelligent Income Investor, where you’ll find in-depth coverage of my favorite plays across diverse sectors.
And always remember: What you do with those profits – from sin stocks or other income plays – is up to you. You could take your dividends and donate to a cancer research fund or other charitable institution.
But to do good, you first must do well.
And that’s our goal for you here: To help you reach your financial dreams with the most successful investments on the planet.
Happy SWAN investing,
Brad Thomas
Editor, Intelligent Income Daily