Does It Pay To Make Sinful Investments?

“Sin-vesting” is a term used to describe investing in industries which lack morality and/or social responsibility. Does it pay to be a sin-vestor?

There are many investments which could be deemed sinful, but in the stock market, the title of “sin stock” is generally reserved for companies involved in alcohol, tobacco, gambling, and adult entertainment.

I think we can all agree that every industry has sinned at some point, but here is a list of five sin stocks:

Diageo (Ticker: DEO) – The chart of this wine, beer and spirits company has moved similarly to the S&P 500 since mid-2006, but sits 20 percent above the index. (View the 5-year chart)

Altria (Ticker: MO) – This tobacco giant is the repackaged Phillip Morris. The stock took a nosedive in 2008 and has trailed the S&P by a huge margin ever since. (View the 5-year chart)

MGM Mirage (Ticker: MGM) – Shares of this casino company were climbing steadily until mid-2007.  Soon after, the stock peaked near $100, but it has since fallen below $10. The descent was far deeper than that of the S&P.  (View the 5-year chart)

Playboy (Ticker: PLA) – This “media and lifestyle” company provides adult entertainment. In the spring of 2006, the stock began falling and has yet to get up. The chart makes the S&P 500 look like a saint! (View the 5-year chart)

International Game Technologies (Ticker: IGT) - The stock of this slot machine maker has lagged behind the S&P for much of the past five years. It has lost about 60 percent of it’s value since mid-2004 versus a loss of about 20 percent for the S&P 500. (View the 5-year chart)

If you are really interested in sin-vesting, try a sin fund to diversify and reduce your risk. The video link below shows MSN Money’s Tim Middleton discussing sin funds in a CNBC interview.

My list included a random selection of five stocks, and from the sample’s performance, sin is not in!

Social responsibility is out; ’sin-vesting’ is in