Home » sin stocks » Sin Stocks Report: Summer Of Sin #20 — How Have Sin Stocks Trended Historically?

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It’s one thing to talk about sin stocks and to suggest that they have compelling returns, but it’s quite another to actually see how their trends stack up. So, how have sin stocks trended historically?

How Have Sin Stocks Trended Historically?

When you study sin stocks, you’ll hear a lot about how sin stocks provide strong returns and even recession-resistant returns. And, while past performance does not guarantee future results, we do like to consider it as a factor in our due diligence to hint at what a stock has been typically like.

For example, earlier you’ve heard us reference Wharton Professor Jeremey J. Siegel’s 2005 book The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New, which found that cigarette stock Altria (MO) was THE stock with the highest returns between 1925 and 2003, returning an average of 17% per year during those 78 years. (Source: https://www.thestreet.com/story/13606834/1/4-sin-stocks-that-reward-investors-with-their-heavenly-dividends.html)

Aside from the Altria example, how have sin stocks trended historically… in general?

To get a simple-to-understand answer, you might want to find a resource that will compare multiple stocks on one chart.

One such resource is http://bigcharts.marketwatch.com/. If you use their Advanced Chart function, you can start with one stock (for example, you might use the Dow Jones Industrial Average as a baseline example) and you can add other stocks, too, to get a simple at-a-glance comparison.

To get started, consider comparing just 3 sin stocks against the DJIA. We’ll use one sin stock from each of the three big sin stock categories — alcohol sin stocks (we’ll use Anheuser Busch InBEV (BUD)), tobacco sin stocks (we’ll use Altria (MO)), and gambling sin stocks (we’ll use Wynn Resorts (WYNN)). And, we’ll extend the chart as far back as it will historically go (10 years at the BigCharts site we’re using).

Looking at the chart reveals even at a glance that sin stocks typically out-perform the Dow Jones Industrial Average. BUD and MO outpace the DJIA consistently throughout the past 10 years. Wynn, which has struggled a bit, still outpaced the Down significantly for many years, with a couple of drops below the DJIA price.

Is this definitive proof? Absolutely not. But, like any piece of information, it’s one extra datapoint for us to consider. And don’t just stop with the 3 stocks we’ve compared to the DJIA; keep going. As you complete your due diligence you will sort through many sin stocks and may find that some of them are great and consistently out perform the DJIA while others may struggle. Use that datapoint to consider what it might tell you about future performance.

For example, if a company has struggled in the past but made a change in management, you may see a change in price as the company’s new management makes improvements. Or, if a company has done really well but a new piece of legislation came in, you may notice the price drops. Comparing it to the DJIA is a helpful baseline so that you’re not just looking at one price in a vacuum.


Nothing on this site is a recommendation because, hey, I can't read your mind and I don't know what you have in your portfolio, and I'm not a licensed financial advisor. So never EVER trade without doing your due diligence. If you want more information about this fascinating topic, please check out the Sin Stocks Disclaimer page which basically says the same thing but more emphatically.