It’s a Great Time of Year to Consider Sin Stocks: Diageo plc (ADR) (DEO), Anheuser-Busch InBev NV (ADR) (BUD) and More

Anheuser-Busch InBev NV (ADR) (NYSE:BUD) offers investors a divided yield of slightly less than 2% at current prices. The company reported 2012 sales inched up about 2%, although earnings from operations increased more than 3.27% year over year. AB-InBev was able to realize increased profit growth as a result of lowered expenses. The company’s profit margin increased two percentage points versus the prior year. The stock’s performance last year was incredibly impressive, rising more than 45%. After last year’s rally, the stock now carries a $154 billion market value and a trailing price-to-earnings ratio in the high teens.

Saintly returns from sin stocks

Each of these three stocks engaged in the alcohol industry has provided investors with solid operating performance and even better stock price performance over the past few years. Sin stocks such as these provide reliable operating cash flows, and dependable (if unspectacular) sales growth.

None of these stocks appears to be a screaming bargain, but they offer a measure of safety in their world-class brands. Furthermore, demand for alcohol is relatively inelastic, meaning these producers can charge increasing prices without incurring a measurable loss in revenues, adding another layer of safety to the investing merits of these three great sin stocks.

As the calendar turns toward spring and summer, there are many events in which discerning adults will likely enjoy a few of the products that these companies offer. For investors equally interested in enjoying stocks that reward them with compelling growth, dividends, and share buybacks, these stocks should be on your watch list.

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