Diageo
Diageo plc (Ticker- FTSE: DGE) is a multinational alcohol drinks business based in the United Kingdom. Listed on both the UK FTSE and dual listed on the New York Stock Exchange under (DEO)
The company operates around the global manufacturing and distilling whiskey, brandy, bourbon, gin, rum tequila and Guinness from 100+ sites.
The group boasts a portfolio of over 200 brands so here is a small variety of their popular brands like: Tanqueray, Smirnoff, CiRoc, Captain Morgans, Baileys, Pimm’s, Sheridan’s, Johnny Walker, Bells, Haig, Don Julio, Buchanan’s and Guinness.
There is also a fine wine division by Justerini & Brooks.
Diageo Brands
With only a 4.7% total beverage market globally Diageo has plenty of room to expand. There is also a focus on premium brands and expanding their reach to greater audiences by offering differing versions and qualities expanding portfolio’s like the Johnny Walker brand with Black & Blue labels. Flavoured vodka’s from Smirnoff.
Global sales in 2023 were £17,113 Billion (2022 £15,452 Billion) with free cashflow of £1.8 billion pounds. Operating profit grow by 5.1% with EPS (earnings per share) up by 17.6% or 164.9 pence verses 140.9 pence per share. Total share return was actually down by (2%) and return on invested capital was down by 16.3% even though sales had increased.
Diageo average five year share price
The average share price over the last five years (08/2019 to 08/2024) for Diageo (DGE) sits between:
The lowest point of £21.39 on 18th March 2020 at the start of the pandemic.
To the highest of £41.10 on the 08/01/2022.
Based on my own personal experience looking at a long term hold, today I would be looking to purchase additional shares around the £23.75 to £25.00 price target.
The ideal exit strategy would be to hold for 10-15 years before selling at a target sell price between £45.00- £55.00.
Diageo Dividend
Diageo distributes a bi-annual dividend usually payable in the months of April & October.
As you will see in the file below, this equity was held in the portfolio in 2016 where I collected one lot of dividends before selling the stock and taking a little profit.
DGE was reintroduced into the portfolio in 2023, increasing in early 2024 with the aim to increase further over the course of the next 18 months.
The group states it has a progressive dividend policy and has returned £3.1 Billion to shareholders through a dividends and share repurchases.
2024 Final declared dividend is £0.4923 pence payable on the 17/10/2024 (Ex-div date 28/08/24)
Dividend cover 1.67 (30/06/24)
The current 2024 dividend stands at £0.8128 pence per share (2023 – £0.80 per share).
Dividend yield: 3.08% (17/11/24)
P/E: 19.54 (17/11/24)
Further dividend analysis can be seen in the file below:
DGE
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