Image source: Getty Images
The current level of Diageo (LSE: DGE) Share price near 3,600 pence makes the stock look attractive I think.
The fast-moving consumer goods business specializes in branded alcoholic beverages. And the valuation has always seemed pretty comprehensive.
But that situation has been improving: The stock price has been consolidating for about a year and a half. And it first reached its current level just over 19 months ago.
Value has been building
Meanwhile, the business has been growing. And the value has been accumulating. In fact, revenue, profit and shareholder dividend have increased in the last two years. And City analysts expect more earnings to come.
However, in the last 12 months, the share price has fallen by around 8%.
It appears that the company has been caught up in the general malaise that has been plaguing the stock markets recently. But the situation may be creating an opportunity for investors to consider looking into it for long-term holding.
It looks like earnings will be up about 8% in the business year through June 2024. And the anticipated dividend yield for that year is just under 2.4%.
That’s not a great return, but the business has a decent track record of raising shareholder pay a bit each year. And the dividend progression continued during the pandemic, underscoring the resilience of the business.
change below
But a change is coming. A new CEO, Debra Crew, will take over on July 1 after being promoted from the role of chief operating officer. And that’s after the impending retirement of the current boss, Sir Ivan Menezes, who has been in charge for a decade or so.
Change at the top can often work to reinvigorate a business when the new incumbent arrives with fresh ideas and a new determination to succeed. Therefore, I see the move as positive for shareholders.
That being said, the stock price is up just over 80% under the outgoing boss. And there’s been a growing stream of dividends to shareholders on top of that capital gain.
Meanwhile, Crew said on March 28 that it’s a “incredible privilege” for the opportunity to guide Diageo through the next stage of its development. And there will be a focus on continuing the effort to build world-leading brands in “the most exciting consumer product category.”
In the meantime, those brands have the potential to support an investment in stocks. I mean the well-known names of the company, such as johnnie walker, guinness, Tanqueray, baileys, smirnoff and many others.
However, even quality companies can experience operational setbacks. And despite the lower-than-before valuation, the stock price may drop or stay close to where it is for an extended period.
In fact, all actions carry risks as well as potential upside. However, my feeling is that now is a good time to investigate the business. And the stock has the potential to make a valuable contribution to a diversified portfolio over the long term.
var config = {
apiKey: ‘1ed121d592e04642d57912bb369ef696621661a3’,
product: ‘PRO_MULTISITE’,
logConsent: false,
notifyOnce: false,
initialState: ‘NOTIFY’,
position: ‘LEFT’,
theme: ‘DARK’,
layout: ‘SLIDEOUT’,
toggleType: ‘slider’,
iabCMP: false,
closeStyle: ‘button’,
consentCookieExpiry: 90,
subDomains : true,
rejectButton: false,
settingsStyle : ‘button’,
encodeCookie : false,
accessibility: {
accessKey: ‘C’,
highlightFocus: false },
onLoad: function () { // hide Cookie Control recommended settings button.
var recommendedSettingsButton = document.getElementById(‘ccc-recommended-settings’);
if (recommendedSettingsButton) {
recommendedSettingsButton.classList.add(‘hide’);
} },
text: {
title: ‘Privacy Notice’,
intro: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
necessaryTitle: ”,
necessaryDescription: ”,
thirdPartyTitle: ‘Warning: Some cookies require your attention’,
thirdPartyDescription: ‘Consent for the following cookies could not be automatically revoked. Please follow the link(s) below to opt out manually.’,
on: ‘On’,
off: ‘Off’,
accept: ‘Accept’,
settings: ‘Cookie Preferences’,
acceptRecommended: ‘Accept Recommended Settings’,
notifyTitle: ‘Privacy Notice’,
notifyDescription: ‘This site uses cookies, pixels, and other similar technologies to improve your web site experience and to deliver you personalised ads about our own and third party products and services. Please read more about how we collect and use data about you in this way in our Cookies Statement in our Privacy Policy. You can change your cookie settings in your browser at any time. ‘,
closeLabel: ‘Save Preferences and Close’,
accessibilityAlert: ‘This site uses cookies to store information. Press accesskey C to learn more about your options.’,
rejectSettings: ‘Reject All’,
reject: ‘Reject’,
},
branding: {
fontColor: ‘#fff’,
fontFamily: ‘Arial,sans-serif’,
fontSizeTitle: ‘1.2em’,
fontSizeHeaders: ‘1em’,
fontSize: ‘1em’,
backgroundColor: ‘#313147’,
toggleText: ‘#fff’,
toggleColor: ‘#2f2f5f’,
toggleBackground: ‘#111125’,
alertText: ‘#fff’,
alertBackground: ‘#111125’,
acceptText: ‘#ffffff’,
acceptBackground: ‘#111125′,
buttonIcon: null,
buttonIconWidth: ’64px’,
buttonIconHeight: ’64px’,
removeIcon: false,
removeAbout: false },
necessaryCookies: ( ‘wordpress_*’,’wordpress_logged_in_*’,’CookieControl’,’PHPSESSID’,’fivc’,’fivs’,’fivp’,’Ookie’,’Fool_subinfo’,’_gads’,’_gid’,’_gat’,’_ga’,’__utma’ ),
optionalCookies: (
{
name: ‘Sharing’,
label: ‘I would like content tailored to my personal preferences.’,
description: ‘We work with advertising partners to show you ads of products and services you may be interested in. You can choose whether or not to have ads delivered in a personalised way by setting this option. You can return to review this setting at any time by clicking the "C" logo in the bottom left corner of any page.’,
cookies: ( ‘_ga’, ‘_gid’, ‘_gat’, ‘__utma’, ‘_gads’ ),
onAccept: function () {
// Add Facebook Pixel
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=();t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)(0);
s.parentNode.insertBefore(t,s)}(window,document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘901682110316659’);
fbq(‘track’, ‘PageView’);
fbq(‘consent’, ‘grant’);
// End Facebook Pixel
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, true ) ;
},
onRevoke: function () {
fbq(‘consent’, ‘revoke’);
// Enable Google ad personalization
// gtag (‘set’, ‘allow_ad_personalization_signals’, false ) ;
},
recommendedState: ‘on’,
lawfulBasis: ‘consent’,
},
),
statement: {
description: ”,
name: ”,
url: ‘https://www.fool.co.uk/help/privacy-and-cookie-statement/’,
updated: ”
},
};
CookieControl.load(config);
