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Altria and 3 Other Sinfully Good Stocks for Your Portfolio
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As the saying goes, hate the sin but not the sinner. Gambling, alcohol and tobacco stocks encourage bad habits but they can actually yield handsome returns for your portfolio. Though these stocks might not be in accordance with the accepted principles of right and wrong, gambling, alcohol and tobacco stocks can actually yield handsome returns for your portfolio.
Why Are These Stocks Smoking Hot?
Since people continue to smoke and drink even during times of recession as well as economic growth, such stocks are sometimes valued at a premium compared to companies that are more sensitive to economic trends. As a result, these stocks always benefit from the addictive nature of their products.
Let us now have a look at 4 stocks that can be addictive additions to your portfolio.
The 4 Sinful Picks
Altria Group Inc.(MO - Free Report) : This Zacks Rank #2 (Buy) stock fares well in the style score system too, with a Growth score of A. For the long term, Altria is expected to grow by 7.48%. Further, the stock had a good run so far this year, gaining around 12.01%. Over the past 30 days, analysts have become increasingly bullish on the company, with major estimate revisions moving north for fiscal 2016 earnings.
The company reported better-than-expected results in the recently concluded first-quarter 2016. Altria’s top- and bottom-line improved year over year backed by higher shipments and retail share gains by its flagship brand, Marlboro. Supported by lower excise tax, gross profit and operating income increased year over year during the period.
Reynolds American Inc.: This Zacks Rank #2 (Buy) tobacco stock has had a healthy run so far this year, gaining around 10.6% in price. Over the past 60 days, analysts have become increasingly bullish on the company, with most of the estimates moving north for 2016 earnings. Reynolds also reported higher year over year earnings and sales in first-quarter 2016 backed by increased cigarette and moist snuff pricing. Further, Reynolds' earnings are poised to grow 18.7% this yearand 11.4% in the next.
Reynolds’ impressive brand portfolio of tobacco products helps it maintain strong business momentum and generate decent profits. Further, the company invests continuously in innovation and brand, which have helped it to maintain its leading position in the industry.
Molson Coors Brewing Company (TAP - Free Report) : This Zacks Rank #1 (Strong Buy) company has a market cap of $22.1 billion and has the potential of robust 59.4% earnings growth in fiscal 2017.
Almost all analysts have become increasingly bullish on the company and have moved their estimates northward during the past 60 days. Molson Coors reported better-than-expected results in first-quarter fiscal 2016 owing to worldwide volume growth and lower cost of goods sold. These factors more than offset the negative impact from an unfavorable sales mix, higher brand spending, higher underlying tax rate and currency headwinds.
The company continues to focus on the above-premium segment, thereby growing its market share, despite weak consumer demand across its largest markets.
Diageo plc.(DEO - Free Report) is another alcoholic beverage maker carrying a Zacks Rank #2 (Buy) which is worth keeping in the portfolio. Diageo fares well in the style score system too, with a Momentum score of A. Diageo has a considerable geographical extent and a strong presence in emerging markets. Diageo’s earnings are expected to grow by 7% in fiscal 2017. Analysts have become increasing bullish on the company and 2 out of 3 analysts have raised their estimates in the past 30 days for the current fiscal. The company’s policy of putting greater thrust on high-margin products also helps it to maintain profit even during times of recession. Further, Diageo is disposing of its non-core assets like the hotel at Gleneagles. Going forward, such a strategy is expected to help the company to focus on its core business and maintain its share in the spirit business.
Sinfully Good
These stocks enjoy steady sales growth on positive pricing and reward investors with attractive yields. While Altria and Reynolds American pay out dividends that yield more than 3%, Molson Coors and Diageo have dividend yields of 1.6% and 2.3%, respectively.
Thus, though these stocks might not appeal to you ethically, these can be amazing additions to your investment pack.
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Altria and 3 Other Sinfully Good Stocks for Your Portfolio
As the saying goes, hate the sin but not the sinner. Gambling, alcohol and tobacco stocks encourage bad habits but they can actually yield handsome returns for your portfolio. Though these stocks might not be in accordance with the accepted principles of right and wrong, gambling, alcohol and tobacco stocks can actually yield handsome returns for your portfolio.
Why Are These Stocks Smoking Hot?
Since people continue to smoke and drink even during times of recession as well as economic growth, such stocks are sometimes valued at a premium compared to companies that are more sensitive to economic trends. As a result, these stocks always benefit from the addictive nature of their products.
Let us now have a look at 4 stocks that can be addictive additions to your portfolio.
The 4 Sinful Picks
Altria Group Inc.(MO - Free Report) : This Zacks Rank #2 (Buy) stock fares well in the style score system too, with a Growth score of A. For the long term, Altria is expected to grow by 7.48%. Further, the stock had a good run so far this year, gaining around 12.01%. Over the past 30 days, analysts have become increasingly bullish on the company, with major estimate revisions moving north for fiscal 2016 earnings.
The company reported better-than-expected results in the recently concluded first-quarter 2016. Altria’s top- and bottom-line improved year over year backed by higher shipments and retail share gains by its flagship brand, Marlboro. Supported by lower excise tax, gross profit and operating income increased year over year during the period.
Reynolds American Inc.: This Zacks Rank #2 (Buy) tobacco stock has had a healthy run so far this year, gaining around 10.6% in price. Over the past 60 days, analysts have become increasingly bullish on the company, with most of the estimates moving north for 2016 earnings. Reynolds also reported higher year over year earnings and sales in first-quarter 2016 backed by increased cigarette and moist snuff pricing. Further, Reynolds' earnings are poised to grow 18.7% this yearand 11.4% in the next.
Reynolds’ impressive brand portfolio of tobacco products helps it maintain strong business momentum and generate decent profits. Further, the company invests continuously in innovation and brand, which have helped it to maintain its leading position in the industry.
Molson Coors Brewing Company (TAP - Free Report) : This Zacks Rank #1 (Strong Buy) company has a market cap of $22.1 billion and has the potential of robust 59.4% earnings growth in fiscal 2017.
Almost all analysts have become increasingly bullish on the company and have moved their estimates northward during the past 60 days. Molson Coors reported better-than-expected results in first-quarter fiscal 2016 owing to worldwide volume growth and lower cost of goods sold. These factors more than offset the negative impact from an unfavorable sales mix, higher brand spending, higher underlying tax rate and currency headwinds.
The company continues to focus on the above-premium segment, thereby growing its market share, despite weak consumer demand across its largest markets.
Diageo plc.(DEO - Free Report) is another alcoholic beverage maker carrying a Zacks Rank #2 (Buy) which is worth keeping in the portfolio. Diageo fares well in the style score system too, with a Momentum score of A. Diageo has a considerable geographical extent and a strong presence in emerging markets. Diageo’s earnings are expected to grow by 7% in fiscal 2017. Analysts have become increasing bullish on the company and 2 out of 3 analysts have raised their estimates in the past 30 days for the current fiscal. The company’s policy of putting greater thrust on high-margin products also helps it to maintain profit even during times of recession. Further, Diageo is disposing of its non-core assets like the hotel at Gleneagles. Going forward, such a strategy is expected to help the company to focus on its core business and maintain its share in the spirit business.
Sinfully Good
These stocks enjoy steady sales growth on positive pricing and reward investors with attractive yields. While Altria and Reynolds American pay out dividends that yield more than 3%, Molson Coors and Diageo have dividend yields of 1.6% and 2.3%, respectively.
Thus, though these stocks might not appeal to you ethically, these can be amazing additions to your investment pack.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>