An updated edition of the May 19, 2025, article.

The stock market is often seen through the lens of morality these days, with Environmental, Social, and Governance (ESG) investing growing rapidly. However, there is another side to the market that continues to quietly draw interest from investors focused on returns over reputation — the sin stock market.

Sin stocks represent companies operating in industries deemed socially or ethically controversial, yet they often deliver steady profits. These typically include alcohol, tobacco, cannabis and gambling. These businesses cater to human immoralities and are frequently heavily regulated, but they also generate steady revenue streams due to consistent demand. While shunned by many institutional funds, sin stocks have carved out a loyal base of contrarian investors drawn to their resilience and income potential.

What sets these stocks apart is their behavior relative to the broader market. Despite ethical concerns, these stocks are defensive, offering growth even in economic downturns. People tend to continue smoking, drinking or gambling even when the economy slows. These companies typically enjoy strong pricing power and resilient profit margins. Additionally, sin stocks are known for generating stable cash flows, driven by their steady income. As a result, many of these businesses reward shareholders generously through regular and often above-average dividend payouts, making them attractive to dividend-focused investors.

However, investing in sin stocks comes with ethical considerations. Industries like tobacco and gambling are linked to adverse health and social consequences, which may clash with the values of individual or institutional investors. Additionally, these sectors are subject to stringent regulations, legal scrutiny and shifting political sentiment, all of which can impact profitability and long-term stock performance. Negative public perception can also weigh on investor sentiment and limit institutional ownership.

Ultimately, investors must carefully assess whether sin stocks align with their financial objectives and personal values.

For instance, Philip Morris International (PM Quick QuotePM - Free Report) dominates the tobacco industry, with strong pricing power, accelerating smoke-free growth and consistent earnings momentum. PM has proved that it is more than just a legacy tobacco company; it is a forward-thinking leader in the global shift toward reduced-risk products.

Similarly, as sports betting legalization accelerates and online gaming expands, Caesars Entertainment (CZR Quick QuoteCZR - Free Report) has positioned itself as a leader in the gambling sector. CZR's efforts to integrate its digital and physical offerings through a cohesive omnichannel strategy support its goal of driving seamless cross-platform engagement and enhancing customer loyalty.

Tracking the Trends in Sin Stock Sectors

The U.S. alcohol market is in a dynamic phase, with strong momentum in categories like spirits and ready-to-drink (RTD) beverages, even as others plateau. Overall growth remains supported by shifting consumer preferences toward premium offerings, increased online alcohol sales, and a rising demand for wellness-driven, low-ABV alternatives.

According to ResearchAndMarkets.com, the U.S. alcoholic beverages market is expected to grow from $544.19 billion in 2024 to $573.98 billion in 2025, witnessing a compound annual growth rate (CAGR) of 5.5%. The industry is expected to reach $709.13 billion by 2029, seeing a CAGR of 5.4%.

The U.S. tobacco landscape is shifting, with cigarette sales declining and consumers gravitating toward alternatives like vapes, nicotine pouches and smokeless options. In response, companies are accelerating product innovation and repositioning their brands. A SkyQuest report estimates that the U.S. tobacco market will grow from $85.93 billion in 2024 to $112.28 billion by 2032, witnessing a CAGR of 3.4% over 2025-2032.

The gambling industry is undergoing rapid expansion, fueled by the rise of online gambling platforms, casino development and the widespread legalization of sports betting. Mobile adoption, strategic sports partnerships and product innovation are supporting growth of online gambling in the United States. According to Mordor Intelligence, the global online gambling market is projected to reach $12.81 billion in 2030, seeing a CAGR of 16.5% from 2025 to 2030.

Sin stock investing is not about ethics; it is about economics. For investors willing to look beyond societal judgment and the regulatory noise, sin stocks offer the potential for solid returns and reliable income. However, these carry reputational and legal risks that each investor must weigh individually.

If you are looking to capitalize on this trend, our Sin Stocks Screen makes it easy to identify high-potential stocks such as Altria Group (MO Quick QuoteMO - Free Report) , Las Vegas Sands (LVS Quick QuoteLVS - Free Report) and Constellation Brands (STZ Quick QuoteSTZ - Free Report) .

Explore 30 cutting-edge investment themes with Zacks Thematic Screens and uncover your next big opportunity.

Altria, the company behind Marlboro in the United States, stands at a pivotal moment in its history. With a decline in smoking rates and nicotine preferences rapidly shifting, the company faces growing pressure to move beyond its cigarette-heavy roots. While Altria still commands more than 40% of the U.S. cigarette market, cigarette volumes continue to shrink, and pricing power — a key buffer for years — is beginning to lose effectiveness amid inflation and growing consumer price sensitivity.

The broader tobacco landscape is clearly evolving, and for Altria, the urgency to accelerate its transition into RRPs has never been greater. To address this shift, it is building a smoke-free portfolio, focusing on modern oral nicotine and vapor products. In addition, Altria is actively retooling its e-vapor platform through NJOY, following recent regulatory setbacks. Altria remains committed to offering science-based, regulated vapor products that meet the evolving preferences of adult consumers.

To drive long-term value creation, Altria has introduced its “Optimize & Accelerate” initiative — a forward-looking program designed to improve speed, agility and cost efficiency. Meanwhile, pricing power remains a critical pillar of Altria’s growth strategy. The company continues to leverage strategic price increases to offset soft volumes in traditional cigarette segments and navigate a challenging regulatory landscape. The Zacks Rank #2 (Buy) company's ability to sustain profitability, even amid cigarette volume declines, demonstrates its pricing resilience. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Las Vegas Sands is a premier global developer of integrated resort properties, with core operations in the United States and Asia. The company’s solid business model, high-quality assets and prime property locations position it well to capitalize on long-term tourism and gaming trends. Notably, LVS derives a significant share of its revenues from Macao, where its strategy centers on scale, high-end development and targeted investments to strengthen its competitive advantage in a dynamic market.

LVS’s resilience is underpinned by its diverse revenue streams, particularly in non-gaming segments like entertainment, hospitality and retail. This diversification has helped the company navigate macroeconomic headwinds, especially in China, while maintaining EBITDA strength and delivering solid returns on invested capital. In the United States, Las Vegas Sands is actively pursuing a land-based downstate casino license in New York, identifying the Nassau Coliseum site as the most viable and competitive option. The company remains confident in the project's potential and continues to advance its development vision.

Meanwhile, Singapore has seen a robust rebound in travel and tourism, benefiting LVS’s flagship Marina Bay Sands (“MBS”) property. Recent investments totaling $1.75 billion have upgraded MBS through a comprehensive renovation of suites and guest rooms. Phase II added 775 luxury suites and 1,069 refurbished rooms, while Phase I introduced 1,300 enhanced rooms, including 390 new high-end suites. These upgrades also enhanced gaming, dining, retail and entertainment offerings, reinforcing MBS as a world-class integrated resort.

Backed by a strong portfolio, strategic geographic positioning, and ongoing reinvestment in key assets, Las Vegas Sands remains well-positioned for sustainable long-term growth. The Zacks Rank #3 (Hold) company's continued focus on high-margin opportunities and integrated resort development supports its growth trajectory despite a cautious near-term outlook.

Constellation Brands is a leading premium beverage company with a dominant presence in the U.S. beer market, driven by top-performing brands like Modelo Especial and Corona Extra. Its strong market position in imported beers continues to benefit from demographic tailwinds and consumer preference for high-quality, flavorful options. The company is also expanding its footprint in premium wine and spirits through acquisitions and portfolio optimization. This brand strength and diversified portfolio underpin the company’s ability to generate steady revenues and a robust cash flow.

Long-term growth is supported by STZ’s focus on premiumization, innovation and digital transformation. The beer segment is expected to grow 7-9% annually, with investments in capacity and marketing enhancing market share. In the wine and spirits segment, the company has shifted toward upscale brands, exiting lower-margin categories to improve profitability. Additionally, its early moves into RTD cocktails and non-alcoholic beverages position it well to capture evolving consumer trends.

Constellation Brands maintains a disciplined capital allocation strategy, balancing reinvestment with shareholder returns. The company has committed to share buybacks, regular dividend increases, and deleveraging its balance sheet, all while investing in growth. Recent enhancements at Marvin Sands’ owned breweries and operational cost savings initiatives reflect management’s execution strength. Despite risks such as potential tariffs on Mexican imports and changing consumer preferences, the Zacks Rank #3 company’s strategic focus and strong brand equity make it a compelling long-term investment opportunity.