Please ensure Javascript is enabled for purposes of website accessibility

Diageo plc (DEO)

Diageo plc (DEO, NYSE) is the world’s largest premium alcoholic beverage company. Its major brands include Guinness stout, Smirnoff vodka, Johnnie Walker scotch whisky, Captain Morgan rum and Bailey’s Irish Cream. In its latest fiscal year, which ended June 30, 2010, Diageo’s sales rose 5.0%, to 9.8 billion pounds from 9.3 billion pounds in the prior year (1 British pound = $1.53 U.S.). Overall sales volumes rose 2%. Volumes fell 2% in North America. However, that was more than offset by a 1% gain in Europe, a 2% rise in the Asia Pacific region and an 8% jump in other markets. Earnings per American Depositary Receipt (ADR) rose 3.0%, to 2.65 pounds from 2.57 pounds. Each ADR represents four Diageo common shares. If you exclude costs related to a restructuring, which included laying off workers and closing distilleries and warehouses, earnings would have risen 6.3%. The company pays dividends twice a year. For fiscal 2010, these payments totaled 1.52 pounds per ADR, up 5.5% from 2009. That gives Diageo’s stock a 3.6% yield. Diageo is a buy.

Patrick McKeough, Wall Street Stock Forecaster

Patrick McKeough is one of Canada’s top safe-money advisors. A professional investment analyst for more than 25 years, he has developed a stock-selection technique that has proven reliable in both bull and bear markets. His proprietary ValuVesting System™ focuses on stocks that provide exceptional quality at relatively low prices. As early as 1980, Mr. McKeough was recognized as #1 in the world of published investment advice by the Washington, DC-based Newsletter Publishers Association. According to The Hulbert Financial Digest, Mr. McKeough’s Successful Investor newsletter outperformed all other Canadian newsletters over five years, and ranked fifth among all 140 newsletters that Hulbert tracks.