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’s business is organized under the business areas of North America, Europe, Africa, Latin America and Caribbean, Asia Pacific and global Supply. Diageo sells products in more than 180 markets around the world. The Company classifies its brands as spirits, beer, wine and ready to drink. As of June 30, 2012, the principal acquired brands of the Company includes Crown Royal whisky, Captain Morgan, Johnnie Walker whisky, Yeni raki, Shui Jing Fang Chinese white spirit, Smirnoff vodka, Windsor Premier whisky, Bell's whisky and Bushmills whiskey. In August 2011, the Company acquired Mey Icki. In May 2013, Relay BV a wholly owned subsidiary of Diageo Plc acquired a 27.142% stake in United Spirits Ltd. In January 2014, Diageo PLC announced that it has added tequila brand Peligroso to the Company's portfolio. more »

Share Price (Full)
1760.5p
Change
-24.5  -1.4%
P/E (fwd)
17.8
Yield (fwd)
3.1
Mkt Cap (£m)
44,868



  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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