Down 55%, Is Now the Time to Buy Diageo Shares for My ISA?
Diageo shares (LSE:DGE) are trading at a 10-year low, having dropped over half their value since early 2022. Meanwhile, the FTSE 100 index has climbed about 30% during the same period, offering investors much stronger returns elsewhere.
I know this from personal experience, having held Diageo shares in my Stocks and Shares ISA until early this year. After I sold, the stock fell an additional 27%, making Diageo even cheaper and increasing its dividend yield, which now looks quite attractive.
World-Class Brand Portfolio
Diageo owns an impressive lineup of renowned brands, including:
- Johnnie Walker
- Tanqueray
- Gordon’s
- Smirnoff
- Don Julio
- Baileys
- Guinness
This list barely scratches the surface of Diageo’s portfolio, making it surprising that the stock has declined 55% in under four years.
Industry Challenges
The key question is whether this drop signals a valuable buying opportunity or a sign of deeper trouble. The alcohol industry is currently struggling with weak sales, though the exact reasons remain unclear.
“Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums.”
Given these factors, deciding whether to buy Diageo shares involves weighing its strong brand assets against the uncertain market environment.
Author’s Summary
Despite a sharp decline and industry uncertainty, Diageo’s strong brand portfolio and rising dividend yield could present a promising investment opportunity, depending on future market recovery.
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