Twenty Sinful Companies to Give Up for Lent

February 13, 2013 by Jon C. Ogg

Money, US, $100 billsAs Fat Tuesday quickly turns into Ash Wednesday, Lent will take place from Wednesday, February 13 to Saturday, March 30 in 2013. It may not seem like much on the surface, but this puts companies that sell sinful or excessive consumer products in the position where all the sacrificed joys given up during Lent will take place all in the first quarter of 2013. The list of the seven deadly sins includes gluttony, anger, greed, sloth, envy, pride and lust.

24/7 Wall St. wanted to come up with a list of companies that might fall victim to a portion of the public observing Lent by giving up something precious for more than 40 days all contained in the same quarter. We certainly are not trying to say that these products are all bad, because many are too well anchored in our culture to be eliminated for very long. Many of them are even too fun or too precious to give up.

It has been nearly two years since we gave our own list of the 10 things that Americans waste the most money on. You may guess many of them: certain apparel items, tobacco, entertainment, alcohol, TV and media, gifts, food outside of the home and more. We also want to stress that if you live your life to avoid all of those things, chances are high that you are considered the most boring person alive by your friends and neighbors.

All things being equal, many in America and the rest of the world actually do give up something during Lent. Some sacrifices are physical things that cost money. Other sacrifices are simple (or difficult) personal efforts that have nothing to do with wasting money or being bad for your health. We have picked the largest companies that we feel have large direct exposure to changes of public behavior, particularly that fit into the sin or waste category.

Not all of these companies would fit directly within the category of being “sin stocks.” We are not trying to identify companies as being sinful. We are showing many companies that could be adversely impacted if Joe Public takes Lent very seriously this year. As a reminder, we already had one quarter of negative gross domestic product growth, and consumer spending is up to 70% of that figure.

Anger alone is not an easy sin to assign to just one company, but first-person shooter games and violent video games easily fall under the deadly sin of Anger. If one company would be a direct play on this theme of anger, it would be Take-Two Interactive Software Inc. (NASDAQ: TTWO). The Grand Theft Auto franchise has delayed its latest installment, but to date some 125 million Grand Theft Auto titles supposedly have been sold. Other titles in that genre would be Borderlands and BioShock. Take-Two used to be the bad boy on the block in video games with its Rockstar unit. If shooting is that form of anger, well perhaps consumers would want to give on guns. Sturm, Ruger & Co. Inc. (NYSE: RGR) and Smith Wesson & Co. (NASDAQ: SWHC) still have a combined market value of more than $1.6 billion. And sales likely went to well over $1 billion combined for 2012, based on the gun control fears causing every gun store to be emptied out. The problem with talking about gun companies is that we have never heard of someone giving up their love of guns for Lent.

Greed is tough to pin on just one company or just one sector because it can pertain to so many things. Money and finances top the list on greed, but try getting by without your bank in any form at all for 40 days. That being said, we are giving Amazon.com Inc. (NASDAQ: AMZN) the top notch for greed in America. Consumers are shameless about walking into real-life store chains like Best Buy Co. Inc. (NYSE: BBY) and actually using the Amazon system to try to buy the same showcase product cheaper, or at least to avoid paying sales tax. Some would call this smart shopping, but the state and city sales tax collectors might call this greed. Consumers can buy just about anything that they want in the Amazon network, and Amazon helps to fuel this. Maybe we could pin the big monetary success of Wall St. as “greed” to go along with the Gordon Gecko statement “Greed is good.” We could say that Goldman Sachs Group Inc. (NYSE: GS) is the poster child of greed on Wall St., but do not hold your breath for its clients and trading partners to go without dealing with this firm for 40 days.

Sloth is hard to put just one face on because so many companies might lead to the definition of a couch potato and aversion to work or exertion. CBS Corp. (NYSE: CBS) has its lock on sports, news and television shows, as well as ties back to Viacom Inc. (NASDAQ: VIAB), so we are naming it here as our primary sloth company. The reality is that sloth could just as easily be tied to cable companies and a dozen other media companies as well. What makes CBS stand out today is that it is restructuring into a pure-play media outfit. Shares are close to all-time highs, its market value is about $27 billion and annual revenues are approaching $15 billion.

If one company fits in with Pride, or vanity, it has to be the king of social media — Facebook Inc. (NASDAQ: FB). Imagine throwing up a personal bulletin board in front of your house or apartment for anyone you want (or don’t want) to see. You are effectively telling whoever you want what you had for lunch, how drunk you and your friends got at the party over the weekend, the name of your kids and relatives, whether you are in a relationship and more. You might also be putting up a sign in your front yard that says “Away on Vacation!” Facebook is highly addictive for millions of people. It is also one of the greatest time wasters of our lifetime. Maybe this might even fit in with giving up things like bragging and too much self-emulation, but chances are high that your life will not end if you go dark on Facebook for 40 days.

If one public company falls under the category of the sin named Lust it is none other than Rick’s Cabaret International Inc. (NASDAQ: RICK). This is one of the last publicly traded “adult theme” companies. The Yahoo! Finance description calls Rick’s a company that “owns and operates nightclubs that offer live adult entertainment, restaurant, and bar services primarily for businessmen and professionals.” A night club? Well, we would admit that there is dancing there. Rick’s is the largest public gentlemen’s club chain. Its most recent quarter showed gains of about 23% in revenues to $27.1 million, with net income rising about 21% to $2.6 million. As a reminder that revenue is based on sales rung at the register, but it generally does not include those $20 bills that get used for a dance.

Envy is also difficult to assign to one company because envy pertains to too many things like success, possessions, lifestyles and the like. We could assign any number of products like jewelry, high-end cars, expensive apparel, vacations and on and on. Too many people also have bastardized the term jealousy to have the same meaning as envy. That being said, advertisers may be the king of envy as they force you to want or crave a product that someone else has. Companies spend billions of dollars per year trying to make consumers envious enough (or impressed enough) to go buy a product. Two key public companies that cater to advertising and marketing needs with big campaigns are Omnicom Group Inc. (NYSE: OMC) and The Interpublic Group of Companies Inc. (NYSE: IPG). Between these two companies, the combined market value is more than $20 billion, and the annual sales projected for the last year are about $21 billion as well. If you want to fight envy over Lent, maybe you can mute all product advertisements.

Gluttony is supposed to pertain to overconsumption. That can mean food or drink, but perhaps tobacco should be in there too. As this encompasses so many great large companies, we have given Gluttony its own page for the effort.

How exactly does tobacco fit into the seven deadly sins? Is it a form of gluttony? Is it greed? or would it fit into sloth? Regardless of where that debate goes, tobacco was one of our top picks. Altria Group Inc. (NYSE: MO) and Reynolds American Inc. (NYSE: RAI) might as well be equal in things to give up. Altria has the Marlboro Man and Reynolds has Joe Camel. Smoking is cool, or so the Marlboro Man and so Joe Camel want you to think. The Marlboro Man and millions of others through time have died of cancer tied to smoking. Full-time smokers likely will find it hard to put down their packs of smokes for a full 40 days. If they make it that long, perhaps they might quit smoking entirely. Remember, even lowering your tobacco consumption in half is better than nothing. The combined value of these two tobacco giants is close to $100 billion.

In the food department, fast food might be the easiest access to food that the public can get. If so, then McDonald’s Corp. (NYSE: MCD) would be first on the list as the largest food chain in the world, with sales growth of more than 10% to $27 billion in 2012. Yum! Brands Inc. (NYSE: YUM) would be next for its Pizza Hut, KFC and Taco Bell chains, and its sales grew 11% in 2012 to $12.6 billion. Domino’s Pizza Inc. (NYSE: DPZ) is the independent king of pizza, and we all know that pizza might be a very affordable meal but about as far from healthy as you can get.

Anheuser-Busch InBev (NYSE: BUD) is the king of beers, and now its Grupo Modelo acquisition is being challenged, and its annual sales are closing in on $40 billion now. Beam Inc. (NYSE: BEAM) is another gluttony play when it comes to libations, with key brands like Jim Beam, Maker’s Mark, Sauza, Courvoisier and others.

What about The Coca-Cola Company (NYSE: KO) or PepsiCo Inc. (NYSE: PEP)? Do these fall into the theme of gluttony? To many people the answer would be a resounding yes. Sales between just these two companies alone came to more than $110 billion in 2011, with net income between the two being more than $15 billion. Would anyone die without soft drinks for 40 days?

Starbucks Corp. (NASDAQ: SBUX) is the king of coffee in America, and technically this might fit into gluttony on the surface. Coffee is one of those things that many people are unofficially addicted to for that morning pick-me-up, but the reality is that its role in sustenance of your life is nonexistent. This is purely a creature comfort expense each day, and one that if you skipped likely would not result in an economic meltdown nor bring about the rapture. You might even save $2 to $4 a day too. Starbucks had a record $13.3 billion in sales in its fiscal 2012, with net income of nearly $1.4 billion.

The reality is that most of these companies are unlikely to suffer very much from Lent. If anything, the biggest threat to many of these companies would be a weakening economy or overspending that may have taken place around Christmas. Another benefit that the sinful companies win from is that a lack of willpower helps most people quit on most resolutions within days of when they start.

There is one thing that is left to consider. We have never heard it before as an excuse for a company on a conference call. Imagine if a company announced that they think their customers went easy on using their products based upon “overly zealous new year’s resolutions” or being “due to pious behavior that lasted all of Lent.” That would be a first, and it is nearly impossible to consider as a reality.

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