Text size: Small font Default font Larger font

Have an account? Please log in.

.
TSI Network
Patrick McKeough is one of Canada’s top safe-money advisors. The Wall Street Journal, Forbes and The Hulbert Financial Digest have all recognized his ability to find stocks with hidden value. He is editor and publisher of The Successful Investor, Stock Pickers Digest, Wall Street Stock Forecaster and Canadian Wealth Advisor; inventor of the Quick Profit/Value System and the ValuVesting System™. A best-selling Canadian author, he wrote Riding the Bull, the book that predicted the 1990s stock-market boom.

Go global with Diageo

November 25, 2011 -  Be the first to comment
Posted by: Pat McKeough Filed in: Conservative Investing
  • Comments
  •  
  •  
.

DIAGEO PLC ADRs $80 (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 624.5 million; Market cap: $50.0 billion; Price-to-sales ratio: 3.3; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.diageo.com) is the world’s largest premium alcoholic beverage company. Like Yum Brands, U.K.-based Diageo is another Consumer stock that gives investors a less-risky way to profit from overseas markets.

In the fiscal year ended June 30, 2011, Diageo’s sales rose 1.6%, to 9.9 billion pounds from 9.8 billion pounds (1 British pound = $1.63 Canadian). Sales in markets such as Latin America and Africa rose 13%, while sales in Asia Pacific grew 9%. These gains offset slower sales in North America (up 3%) and Europe (down 3%).

Diageo earned 2.1 million pounds, or 3.34 pounds per ADR (each American Depositary Receipt represents four Diageo common shares). That’s up 16.3% from 1.8 billion pounds, or 2.88 pounds per ADR, in fiscal 2010.

These figures exclude costs related to a new restructuring plan, which includes closing distilleries and warehouses in Europe. The plan should cut Diageo’s annual expenses by 80 million pounds by the end of fiscal 2013.

The stock trades at a reasonable 13.3 times the $6.00 U.S. per ADR that it will probably earn in fiscal 2012. The $2.49 U.S. dividend yields 3.1%.

Diageo is a buy.

.

Permalink: http://www.tsinetwork.ca/?p=50414

Tags: , , ,

  • Comments
  •  
  •  
.

Would you like us to inform you when new articles are posted?

What do you think? Go ahead and add your comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.

.

Free Subscription to
The Successful Investor Network Daily

  • Daily investment advice you can act on
  • Free access to our special stock market reports
  • Plus much, much more! Try it today
Twitter Facebook
Follow TSI Network on Twitter and Facebook!

TSI Network Products

In today's economy, it's more important than ever to have clear investment advice that is tailored to your own personal goals. This is where Pat McKeough's conservative safe-investing philosophy comes in. Through TSI Network, you get access to reports, monthly newsletters and premium services that go beyond the daily headlines to give you all the advice and information you need to build a portfolio with long-term growth potential. Simply click on the links below to discover which service is right for you.

.
.