One of the categories on Wall Street that some portfolio managers really don’t want to discuss in their portfolios is the so-called sin stocks. These are companies that sell tobacco and alcohol products, run gambling casinos, sex-related industries, weapons manufacturers and the military. While at the margin they don’t all seem sinful, some money management companies refuse to own any of them.
We screened our 24/7 Wall St. research database for companies that fall into this rather dubious category, and found five stocks that look like outstanding values. They are all rated Buy at major firms on Wall Street, and they all pay outstanding dividends.
This top aerospace industrial is still down over 10% since the beginning of the year, and we recently noted it has been the worst performing Dow Jones Industrial Average stock this year. Boeing Co. (NYSE: BA), together with its subsidiaries, designs, develops, manufactures, sells, services and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services worldwide. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital.
The Boeing Military Aircraft segment is involved in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for the global strike, vertical lift and autonomous systems, as well as mobility, surveillance and engagement.
Boeing investors receive a 3.31% dividend. The Jefferies price target for the stock is $165, and the consensus target is $149.27. The shares ended trading on Thursday at $131.87.
This is one of the largest producers of alcoholic beverages in the world. Diageo PLC (NYSE: DEO) produces, markets and sells beverages worldwide. It offers scotch whiskey, gin, vodka, rum, beer and spirits, Irish cream liqueurs, wine, Raki, tequila, Canadian and American whiskey, Cachaça, and brandy, as well as adult beverages and ready to drink products. The company’s premium brands include Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness.
Diageo’s reserve brands include Johnnie Walker Blue Label, Johnnie Walker Green Label, Johnnie Walker Gold Label 18 year old, Johnnie Walker Gold Label Reserve, Johnnie Walker Platinum Label 18 year old, John Walker & Sons Collection, Johnnie Walker The Gold Route, Johnnie Walker The Royal Route and other Johnnie Walker super premium brands, as well as The Singleton, Cardhu, Talisker, Lagavulin and other malt brands.
Shareholders receive a 2.73% dividend. Merrill Lynch has a $130 price target. The consensus price objective is $123.15. The shares closed most recently at $116.82.