Sizemore says gun stocks don’t deliver dividend payload

With Washington ready to consider new gun control measures, Covestor manager Charles Sizemore, in an interview with Karen Talley at MarketWatch, advises investors to steer clear of gun stocks over the long haul.

“Today, gun stocks are definitely cheap, and they might make a fine short-term trade,” said Charles Sizemore, principal of Sizemore Capital. “But I would not be buying them as a long-term investment.”

What’s lacking, Sizemore told MarketWatch, “is the dividend that you find in most other vice industries, and particularly in tobacco and alcohol. The high and rising dividend is what has made ‘booze and smokes’ such great investments over the years.”

Senate Democratic leaders expect to introduce a gun bill would limit the capacity of ammunition magazines as well as expand background checks to include sales at gun shows, among other measures. A new ban on automatic assault weapons may not be included.

The shares prices of Sturm Ruger & Co. (RGR), Smith & Wesson (SWHC) and Alliant Techsystems (ATK) have rebounded from dips following the massacre at Sandy Hook Elementary School in December. Gun sales have skyrocketed on worries about future gun control measures.

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Author profile

Charles Sizemore
Charles Sizemore
Sizemore Capital Management LLC is a registered investment advisory firm located in Dallas, Texas. Charles Lewis Sizemore, CFA is the founder and Chief Investment Officer of the firm.