Vice Squad

Starting from an all-cash portfolio, I built a five-name 'sin stock' basket that pairs cash-generative dividend payers with more volatile casino/betting names, as the brief asks. On the income side, Altria (25%) gets the largest weight because it combines the highest yield in the universe (5.8%) with the strongest price momentum (+4.9%/+11.3%/+31.4% over 1/3/6 months) and Wall Street still prices it as a discount cash machine — one report notes Altria has a forward dividend yield close to 6%. Philip Morris (20%) is the second dividend anchor: its 3.1% yield is lower, but its smoke-free business (IQOS/ZYN) is growing fast, with net revenues rising 9.1% to $10.1 billion in Q1 2026 and EPS up 16%. Anheuser-Busch InBev (15%) adds alcohol exposure with decent momentum (+27% over 6 months) even though its 1.7% yield is modest, rounding out the steady-cash-flow sleeve at roughly 60% of the portfolio. On the cyclical side, I chose MGM Resorts (20%) over Caesars: Caesars has already agreed to be acquired by Fertitta Entertainment for a fixed $31/share, which caps its upside as a merger-arbitrage situation, whereas MGM is still an independent public company that recently received (and is reviewing) a $48.30/share take-private proposal from People Inc., leaving room for a higher bid, rejection, or continued trading upside, on top of already-strong momentum (+24%/+28% over 3/6 months). Finally, DraftKings (20%) provides pure-play sports-betting exposure: it has no dividend and is down sharply over the past year, but momentum has turned positive recently (+6%/+17.5% over 1/3 months) as it launched a new prediction-markets product and heads into a World Cup catalyst period, making it the higher-beta complement to the casino and tobacco names. Overall the mix is roughly 60% steady dividend payers (MO/PM/BUD) and 40% cyclical gaming names (MGM/DKNG), fully invested with no single position above the 25% cap.