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Three Things to Loathe About Diageo plc (ADR) (DEO)

Now, I know craft beers and artisan spirits are de rigueur (or “le must,” as the French seem to say these days!), but surely the consumers of these products are such a rarefied bunch that the likes of BrewDog pose no threat to a £50 billion global titan. Hasn’t Diageo plc (ADR) (NYSE:DEO) got more important things to do than shoot itself in the foot by pulling a petty dirty-tricks number?

A poor investment?
Diageo has overcome the handicap of a silly, made-up name; the replacement for super-CEO Walsh has been groomed for the role in the same manner as Walsh himself was; and BrewDog-gate soon blew over. I have to say, it’s hard to find much of substance for investors to loathe about Diageo. Long-term holders of the shares have certainly been handsomely rewarded.

So is Diageo actually a good investment? Unfortunately, trading at more than £20, the stock is on a high forward price-to-earnings ratio of 18 and a below-market-average dividend yield of 2.5%. On this rating, Diageo doesn’t strike me as the most compelling offer in the market today.

The article 3 Things to Loathe About Diageo originally appeared on is written by G. A. Chester.

G. A. Chester has no position in any stocks mentioned. The Motley Fool recommends Diageo and Unilever.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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