Monday, April 16, 2007

Investing in consumer (bad health) companies

Yesterday's post made me think about how the same principle holds true for many of the companies that are high, dependable dividend payers, which is the kind I'm interested in, since I don't want to put my money in fixed investments that are eroded by inflation.

Many of the good dividend payers are companies that sell low-cost consumables -- especially snack food. Hershey, Wrigley, McDonalds and so on. Or Philip Morris (now Altria) which sell cigarettes, which is the ultimate bad health type of consumer stock. When I buy those companies am I responsible for the poor health of the people who eat too many of their products? I don't think so -- even of tobacco companies, as politically incorrect as it is to say so. I've never been a smoker, don't want to be a smoker, hate tobacco smoke, don't like to be around it, and I'm glad for reasonable restrictions on it inside public buildings -- though I've come to hate the fascist reminders in airports about not smoking.

Yet nobody forces anybody to go to McDonalds, eat a chocolate bar or even to smoke a cigarette. When I was a teenager I chose not to smoke, and I've kept up that choice through my adult years. And the information about the health problems associated with smoking have only increased since I was a teenager. So anybody who's a smoking teenager or young adult now is smoking despite 100 times more knowledge of its negative health effects than I had.

So why not buy the stocks of these companies and collect the dividends?



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