In this article, we will take a look at the 5 best sin stocks to buy in 2023. If you want to read our introduction about the industry, then take a look at 15 Best Sin Stocks To Buy in 2023.
5. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 47
If we were to give just one solid reason for holding Altria stock in 2023 and beyond, it’s the company’s excellent dividend history. The cigarette company is part of the Dividend Kings group, which includes companies that have raised their dividends consistently for the last 50 years. In addition, Altria is one of the very few dividend kings that have high yields. Its dividend yield stands at over 8% as of January 5.
A total of 47 hedge funds tracked by Insider Monkey reported having stakes in the company as of the end of the September quarter, compared to 48 funds in the previous quarter.
4. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 48
Las Vegas Sands operates several high-end resorts and casinos all over the world. Some of its notable properties include the Marina Bay Sands in Singapore, the Sands Macao, The Londoner Macao, The Venetian Macao, The Plaza Macao, and The Parisian Macao.
The stock recently gained ground after China started reopening its cities. The reopening is expected to cause an increase in foot traffic at the company’s casinos and entertainment centers. The company recently revealed its plans to spend about $3.75 billion over the next ten years in Macau.
A total of 48 hedge funds tracked by Insider Monkey had stakes in the company at the end of the September quarter.
Baron Funds made the following comment about Las Vegas Sands Corp. (NYSE:LVS) in its Q3 2022 investor letter:
“The shares of Las Vegas Sands Corp. (NYSE:LVS) performed well in the most recent quarter in part due to the decision by China’s central government to ease the visa policy for Macau, which should result in increased travel into Macau for the first time since the outbreak of COVID-19.
Sands is a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. We anticipate that management may begin to return capital to shareholders through dividends and share buybacks as Singapore and Macau recover.
The shares are valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.”
3. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 53
One of the most notable sin stocks, MGM Resorts operates extremely well-known casinos and entertainment centers all over the world. Some of these properties include Bellagio, MGM Grand, Mandalay Bay, The Mirage, Beau Rivage and Borgata. It is one of the favorite sin stocks of hedge funds. Of the 920 hedge funds tracked by Insider Monkey, 53 funds had stakes in the company as of the end of the September quarter. The total value of these stakes was $1.1 billion. In the previous quarter, 46 hedge funds had stakes in the company. This shows that the smart money is turning bullish on the stock.
Baron Funds made the following comment about MGM Resorts International (NYSE:MGM) in its Q3 2022 investor letter:
“MGM Resorts International (NYSE:MGM) is a leading global casino and entertainment company with 29 unique hotels and casinos including some of the most recognizable resort brands such as Bellagio, MGM Grand, ARIA, and Park MGM. At its recent price of only $30 per share, we believe MGM’s valuation is compelling at only 6 times 2023 estimated cash flow.”
2. Caesars Entertainment Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 56
Caesars Entertainment is one of the biggest gambling companies in the world. It operates several famous properties, including Circus Circus Reno, The Cromwell, Eldorado Gaming Scioto Downs, Eldorado Reno and Grand Victoria Casino Elgin. A total of 56 hedge funds tracked by Insider Monkey had stakes in the company as of the end of the third quarter.
1. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 63
Philip Morris is one of the best sin stocks to buy in 2023. The company continues to enjoy dominance in the ever-growing tobacco industry. It is a solid defensive play to survive through recession. The company has a dividend yield of over 5% as of January 5. Our hedge fund database shows that Philip Morris is the favorite sin stock among elite hedge funds. 63 hedge funds tracked by Insider Monkey had positions in the company as of the end of the third quarter of 2022, compared to 56 funds in the previous quarter.
On December 8, Philip Morris (NYSE:PM) declared a $1.27/share quarterly dividend, in line with previous. The stock has gained about 5% over the past year.
Here is what Coho Relative Value Equity Fund has to say about Philip Morris International Inc. (NYSE:PM) in its Q3 2022 investor letter:
“Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Philip Morris International, which essentially derives all of its revenues outside the U.S. Harkening back to Table 1, the decline in Philip Morris earnings for 2022 versus the reported earnings in 2021 is entirely related to the strengthening dollar. On a constant currency basis, Philip Morris’ earnings in 2022 would be up mid to high single digits.”
You can also take a peek at 10 Stocks to Buy According to Mark T. Gallogly’s Centerbridge Partners and 8 Stocks to Buy According to Alexander Captain’s Cat Rock Capital.
