Diageo (DEO)
Diageo (DEO) is a worldwide leader in premium brands of alcoholic beverages. Just a few of the premium brands in the Diageo stable include Baileys, Bushmills, Captain Morgan, Crown Royal, Guinness, Gordon’s, Harp, J&B, Johnnie Walker, José Cuervo, Ketel One, Red Stripe, Seagram’s, Smirnoff, Smithwick, and 
Tanqueray.
They have many more! To fully appreciate Diageo, you have to keep in mind that they have well over 20,000 employees in 80 countries around the world. You can get a glimpse of how geographically Diageo is diversified by checking out this fact sheet.
It’s also key to remember that Diageo is also an incredible marketing machine! To bet against Diageo, you have to bet that people will stop drinking, or that someone will market their products better. I rank the first of these a near zero probability. The second is much more likely, but still not very likely in my mind.
Diageo is trading at a little over $57, with a yield of $5.40. I have to say that the PE of almost 17 seems high to me, given the current environment. I have no doubt that this is a great company. I do feel the current price is too high. What do you think?
1/14/09
PS I see today that Morningstar calls Diageo one of “Our Four Favorite International Stocks for 2009.”