Down 55%, Is Now the Time to Buy Diageo Shares for My ISA?
Diageo shares are currently at a 10-year low, making them appear very cheap with a solid dividend yield. Since early 2022, Diageo (LSE:DGE) shares have dropped by more than half their value.
This decline is noteworthy because during the same period, the FTSE 100 index has risen by around 30%, meaning investors could have achieved better returns elsewhere in the market. I speak from personal experience, having held Diageo in my Stocks and Shares ISA until early this year. Since selling, the shares have fallen another 27%, making them even cheaper and the dividend yield more attractive.
Should I Buy Diageo Again?
The company owns a remarkable collection of world-renowned brands, such as Johnnie Walker, Tanqueray, Gordon’s, Smirnoff, Don Julio, Baileys, and the iconic Guinness. Considering this impressive portfolio, it’s surprising that the stock has dropped 55% in less than four years.
"Just writing this list — which is in no way exhaustive — makes me wonder how on earth the stock is down 55% in less than four years."
Understanding why alcohol industry sales are sluggish is crucial to deciding whether this presents a great buying opportunity.
"Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums."
Summary
Diageo’s stock is deeply discounted with a high dividend yield despite its strong brand portfolio, but industry sales struggles create uncertainty about its immediate outlook.
Would you like the summary to be more optimistic or cautious in tone?