Diageo - a defensive play...

Tuesday, Oct 28 2008 by

As a "Sin" stock , Diageo should prove pretty defensive through the economic downturn. Many of its products (e.g. Johnny Walker) may  suffer from some trading down, as consumer continue to drink but drink less expensive products than the Diageo brands but underlying sales grew by 6 percent in its July-September first quarter after an 8 percent sales rise in its previous financial year to June 2008. Chief Executive Paul Walsh said despite the recent turmoil on financial markets the group had not seen any significant adverse changes in its markets. Diageo also has great margins and offers a good dividend. One to have in the portfolio, in my view.

http://www.reuters.com/article/marketsNews/idUSLE4879720081015


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Diageo PLC is an alcoholic beverage company. The Company operates in various categories, including spirits and beer. Its geographic segments include North America; Europe, Russia and Turkey; Africa; Latin America and Caribbean, and Asia Pacific. Its principal products includes Scotch whisky, Gin, Vodka, Rum, Beer, Irish Cream Liqueur, Wine, Raki, Tequila, Canadian Whisky, American Whiskey, Progressive Adult Beverages, Cachaca, Brandy and Ready to Drink. The Company's brands includes Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness. It manages its operations from various locations, including the United Kingdom; Ireland; Italy; Turkey; the United States; Canada; Brazil; Mexico; Australia; Singapore; India; Nigeria; South Africa; East Africa, and Africa Regional Markets. It also produces a range of ready to drink products mainly in the United Kingdom, Italy, South Africa, Australia, the United States and Canada. more »

LSE Price
2215p
Change
0.2%
Mkt Cap (£m)
55,639
P/E (fwd)
21.0
Yield (fwd)
2.9



  Is Diageo fundamentally strong or weak? Find out More »


2 Posts on this Thread show/hide all

Murakami 28th Oct '08 1 of 2

The key pre-Christmas trading period is still to come, and economic conditions continue to deteriorate, but on a relative basis, Diageo should hope up well (as very few stocks will have a good earnings period between now and Xmas, I suspect).

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Stocktaculous 30th Oct '08 2 of 2
1

Everyone's going to trade down - branded labels like this will suffer big-time once the cycle really kicks in.

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