Some sin stocks seem easier to forgive than others. Investor’s preference for alcohol over cigarettes remains an enigma, even if it shows no immediate signs of change.
The tobacco sector shows how quickly popular investments can go awry if regulators decide to crack down on addictive consumer products. Five years ago, large cigarette stocks were trading at 19 times estimated earnings on average, with total annual shareholder returns of more than 20% since 2000 — more than four times the S&P 500 average. They have since fallen off and are only brought up 11 times now, because of the threat of stricter tobacco laws recently. Proposal to ban menthol flavor in America