Quite often we read about societal pressures that have driven the increased use of everything from narcotics to gambling to even the reemergence of nicotine and tobacco. Unfortunately, with many of the economic difficulties of the 21st century, young people, now more than ever, rely on substances and thrills to get through the day. All this may be generally unhealthy for the public. It has led to the emergence of some sin stocks to buy before their products become even more widespread.
While individual investors may struggle with the morality of turning their hard-earned cash to the companies directly that prey on the depravity of society, the money is still there to be made. Moreover, sin stocks can be some of the most stable and lucrative positions to take on the stock market since many constitute significant cultural and social norms such as smoking and drinking. Though I do not personally condone the products or practices of any of these companies, here are three sin stocks to buy for your financial diversification.
DraftKings (DKNG)
It still boggles my mind how online sports betting became so widespread in the United States. Regulators allowed the average U.S. person to install an app on his or her phone to directly bet away exorbitant amounts of money. One of the companies profiting the most from this cultural shift is DraftKings (NASDAQ:DKNG).
With online sports betting now available in more than 20 U.S. states, including large populations like New York, New Jersey, and Pennsylvania, the company has had an enormous customer base to pilfer money from. This has led to investor fervor regarding the stock and has seen its value rise by 95% in the last year alone.
DKNG has a particularly long runway ahead since sports betting does not carry the same negative connotations as traditional casino gambling due to its association with the love of sports. Thus, DKNG is certainly one of the best sin stocks to buy as regulators across the U.S. loosen up on online betting.
Emergent Biosolutions (EBS)
Though not directly a producer or provider of any kind of vice, Emergent Biosolutions (NYSE:EBS) benefits significantly from the current opioid epidemic plaguing America. That’s because the company is one of two major producers of naloxone hydrochloride nasal spray which it sells under its brand name, Naloxone.
Though its sales have been slightly undercut by Teva Pharmaceutical Industries’ (OTCMKTS:TEVJF) generic version of the opioid agonist, EBS has seen 177% growth in the last month alone. A major part of this soaring performance has been the Food and Drug Administration’s (FDA) choice to make the drug available over the counter.
With $118.5 million in Q1 2024 sales for its Narcan product line, the company has now grown its sales of the life-saving drug by 18.5% year-over-year. Thus, as the usage of narcotics like heroin and fentanyl continues to ravage the U.S. population, EBS will undoubtedly have new customers in the form of government first responders, social workers, and parents.
Philip Morris International (PM)
Kurtzgesagt, one of the most successful YouTube channels in the world, recently published a video on why smoking is – unfortunately – awesome. Before you unsubscribe, they ultimately discuss all of the health ramifications and severe consequences of smoking as well. I’m not a smoker myself, as I’m decently allergic to nicotine, but the video expresses the reality of humanity’s relationship with tobacco, which is that we biologically love it.
As such, companies like Philip Morris International (NYSE:PM) are likely to stick around for a very long time. However, the company, which owns Marlboro, the world’s most valuable cigarette brand worth $34.7 billion, has committed to a smoke-free future.
This is a common goal across the major cigarette companies of the world because, as countries develop and populations become more educated, traditional nicotine consumption via smoking tobacco will drop in popularity. Thus, due to its substantial size and share of the tobacco market, PM is certainly one of the best sin stocks to buy for hedging against the future.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
