Ticker: DEO, Buy below $145.
Diageo Plc is a British multinational alcoholic beverages company.
Why I Would Buy
- Opportunistic Buy – Take advantage of coronavirus induced crash to buy a high quality company.
- Industry – Alcohol is a recession resistant business.
- Strong Brands – Diageo owns a large portfolio of leading alcohol brands around the globe.
- Return on Equity: Diageo has earned an eye-popping 25+% returns on equity annually for all of last decade.
- Low Payout: The 2% dividend is just 55% of income.
What Could Go Wrong
- Not A Screaming Bargain – Even with the crash, DEO is trading at 8.5 time book value, and 22 times earnings.
- Coronavirus – Extent of impact on the worls economy is an unkown.
Disclosure: I am long DEO, please read additional disclosures here before taking any action based on this post.