This is our first post on “Sin” stocks. There are not that many foreign stocks that can be categorized as sin stocks. Lets look at two of the tobacco ADRs.
1.British American Tobacco plc
Ticker: BTI
Mkt. Cap: $76+ B
Dividend Yield: 4.89%
2.Imperial Tobacco Group plc
Ticker: ITY
Mkt. Cap: $35+ B
Dividend Yield: 3.91%
Both these cigarette makers have famous brands. For eg - BTI owns the Dunhill, Kool, Luck Strike, etc. brands. It operates in all the continents except Antartica where penguins live and don’t smoke.:-) Imperial owns brands like Davidoff, West, Lambert & Butler, Classic, JPS, Horizon, Maxim, Excellence, The Golden Virginia, etc.
Investing in tobacco stocks is not for the faint hearted since these companies are the target of lawsuits all the time.One multi-million class action case can wipe out many millions from profits.
5-year chart:
Clearly BTI and ITY beat the S&P 500 nicely. A $10K invested 5 years ago in BTI would be worth $42,988 as of May 24, 2008.
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