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.



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Diageo plc (Diageo) is a drinks business company. The Company is a provider of beverage alcohol of various brands in spirits, beer and wine. The Company produces its brands from more than 200 sites in over 30 countries. Diageo owns manufacturing production facilities across the globe, including maltings, distilleries, breweries, packaging plants, maturation warehouses, cooperages, vineyards, wineries and distribution warehouses. Diageo's brands are also produced at plants owned and operated by third parties and joint ventures at a number of locations around the world. Its geographical segments are North America, Europe, Africa, Latin America and Caribbean, Asia Pacific and Corporate. It offers products under various brands, including Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray, Guinness, Crown Royal, Yeni Raki, JeB, Buchanan's, Bundaberg, Ypioca, Cacique, Windsor, Bell's, JeB, Grand Old Parr, Shui Jing Fang, Ciroc and Bulleit Bourbon, among others. more »

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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

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

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