Johnnie Walker scotch has one of the best advertisements I've seen in years.
Maybe you've caught it. It shows hundreds of Mexican men and women unshackling themselves from a massive boulder and climbing up a mountain unchained.
Playing on their popular tagline "Keep Walking," Johnnie Walker's parent company Diageo plc (NYSE: DEO) encourages Mexican consumers to "Keep Mexico Walking."
The ad aims to tell the story of Mexico's long journey from poverty to prosperity.
And it's working. The scotch brand has created a booming market in Mexico – which is why Foreign Policy magazine wrote this month that Johnnie Walker scotch is conquering the world.
This is great news for investors – even if you aren't a fan of scotch…
Diageo is part of a global club known as "sin stocks." These are companies that manufacture products that are considered "bad for you." These companies tend to be recession-proof – meaning their stocks can outperform markets when the economy is shaky.
Sin stocks are a favorite among portfolio owners not just because consumers buy these brands in good times and bad, but also because they tend to provide steady income streams in the form of strong dividends.
Now international sin stocks like Diageo have developed strategies to capture growth from emerging markets, like Mexico. Even though emerging markets have struggled since earlier this year when Ben Bernanke first hinted at a QE taper, their consumers continue to spend money on alcohol, tobacco products, gambling, and fast food.
These stocks are a great way to profit from regions with increasing consumer spending – as U.S. consumers struggle with declining incomes and rising prices.
Here are five sin stocks to buy now.
Sin Stocks to Buy: Diageo (NYSE: DEO)
Diageo manufactures, distributes, and markets global brands of spirits, beer, and wine products. The company's premium spirits brands like Johnnie Walker and Smirnoff are extremely popular with U.S. consumers. But it's the international market that offers the real boost.
With a yield of 2.37%, Diageo is a giant in the emerging markets. The company earns 33% of its profits from emerging markets and has gained double-digit growth abroad. Investors will expect this dividend to increase in the future as well, as the firm has raised distributions each year for more than a decade.
And, as I noted above, they're very good at marketing toward emerging markets.
Sin Stocks to Buy: Philip Morris International (NYSE: PM)
As the world's second-largest tobacco company, Philip Morris International (NYSE: PM) is an ideal sin stock.
And with numbers like these, it's also an ideal way to play global growth…
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.