Anthony Speciale Stock Market Analyst

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What you really need to know about ESG scores

Speaker 1 (00:01):

Hi everyone. I’m Tim Melvin. And this is today’s better way to wealth. Now got a talk out there today about what they call a company’s ESG score that stands for environmental, social, and governance. In other words, they’re ranking these companies on how much good they do and how close they follow to the party line on the hot topics of the field could world today. There is actually a whole new growing class of investors that will accept lower returns. If a company is making donations to the right causes and using the right source of electricity to like their buildings, if they’re doing all that fancy stuff and have this high ESG score, they’ll actually accept lower returns.

Speaker 2 (00:50):

I won’t do that.

Speaker 1 (00:51):

I think that’s insanity. Okay. I want to make the most return. That’s why I’m doing this. If I feel the need to do good, I will take some of my out-sized profits, right? It to the cause of my Joyce. I don’t really care what the company’s ESG score is. In fact, all of the evidence says that the lower ESG scores, what we call sin stocks actually outperform the, the wonderful, you know, social good companies out there. The great ESG scores. We want to talk about sin stocks, alcohol gambling, cigarettes, guns, defense, all that fun stuff. It turns out to be far more profitable and the executives are actually better decision-making because the ACIN stock project has to show a high rate of return, or you can’t do it. You can’t accept a lower return because it’s feels good. You got to get a higher return out of the gate on every dollar that you invest that tends to lead to very positive outcomes.

Speaker 1 (01:52):

When you look at the sin stocks, there’s some pretty cool stocks in there. There’s Phillip Morris, because it’s a gunstock is considered a sense. I’m not fill it more Smith and Wesson son west WPI is considered a sin stock because it’s guns. We love guns. We go shooting all the time and where Smith and Wesson families I talked about last week on the watch list. So we liked that stock Philip Morris was on there for tobacco, and of course they’re going to be a huge player in legal cannabis when that eventually comes along and kicks off a pretty nice dividend to so that’s just in stock. But my favorite since stock right now, I’m going to share with you is actually a real estate investment trust by the name of VG properties. Symbols V I C I, they own casinos all over the United States, 29 casinos four golf courses in the Vegas areas and a big plot of land right off of the Las Vegas strip. The street was formed when all of the properties of Caesar’s palace were put into a REIT to unlock shareholder value in that company. Now they own all the Caesar’s palace. They also own some Harris’ properties. They own Penn national, which gives you exposure to the growing Barstool sports sports book operations. So 

Speaker 2 (03:07):

Perfect. Since stock there’s gambling, there’s

Speaker 1 (03:10):

Booze, most casinos allow smoking and we get cashflow for that. This thing has a 4% dividend they’re constantly making acquisitions to grow the company, which increases cashflow increases the dividend. It’s incredibly well-run. These are premier properties in great locations. Even during the pandemic, they still paid the rent that was due. Okay. Because they knew casinos were going to come back at some point, and you don’t just walk away from a 30 year lease because you don’t really have anywhere else to go. There’s not, it’s not like you could find an old warehouse and put your casino in there.

Speaker 2 (03:45):

You need something that looks like a casino.

Speaker 1 (03:47):

So the rents Allstate paid all the way through the pandemic. It’s fantastic income generation that can be continually reinvested into new shares and a high growth opportunity from my favorites in stock VG properties. Don’t worry so much about those ESG scores guys. They’re just not important when it comes to investing in stocks, doing good. Isn’t what matters making money is I’m Tim Melvin, and that’s another better way to wealth.