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 (Diageo) is engaged in drinks business. The Company is into beverage alcohol with brands in spirits, beer, wine and ready to drink. It owns manufacturing production facilities across the globe, including maltings, distilleries, breweries, packaging plants, maturation warehouses, cooperages, vineyards, wineries and distribution warehouses. The Company’s brands are also produced at plants owned and operated by third parties and joint ventures at a number of locations internationally. It reports its business in five geographic segments: North America, Western Europe, Africa, Eastern Europe and Turkey, Latin America and Caribbean, Asia Pacific. The Company’s brands include Johnnie Walker, Crown Royal, JεB, Buchanan’s, Windsor, Bushmills, Captain Morgan, Smirnoff, Cîroc, Ketel One vodka, Baileys, Don Julio, Tanqueray, and Guinness. more »

Share Price (Full)
1871.87p
Change
-0.3%
Mkt Cap (£m)
47,233
P/E (fwd)
19.5
Yield (fwd)
3.1



  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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