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Naughty or Nice Part II: 5 Delightfully Sinful Dividend Stocks

Stocks with social stigmas often also have bargain pricings

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On Monday, I gave you five socially responsible dividend stock picks that you could feel good about owning. Now, we’re going to go in a different direction — I’m going to give you five delightfully naughty dividend-paying stocks to consider.

I’ll start with a confession: I love sin stocks, and I always have. Because they are politically incorrect, companies in the tobacco, alcohol and defense industries tend to trade at lower valuations and sport higher dividend yields than the broader market. In effect, they are perpetual value stocks, and investors with no qualms about investing in companies with social stigmas attached to them benefit from this pricing.

For a longer explanation on the virtues of being bad, see “The Price of Sin.”

As I’ve written before, not all sin stocks are created equal, and not all vice investments are strong dividend payers. But the following five stocks all pay current yields better than the market average, and many of them are habitual dividend growers.

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