Diageo - DGE Stream Log

Would just add that the current rise in GBP is unhelpful. But imagine that we get a bad/hard Brexit and/or Corbyn in the next 24M. Given the negotiations so far and the ineptness of the current govt neither is beyond the realm of possibilities. There are few better hedges. Do you really want to own UK banks, utilities, real estate, etc. Or a company that is riding the wave of the growing, thirsty, global EM middle classes. I genuinely believe this is a must own stock. Buy, re-invest dividends and return in 10Y...

I agree that the results weren't exciting. And I can't see the share price going anywhere fast. However, it all depends how you see this share and your time horizon. I view it as a core LT bed-rock to my portfolio, which counterbalances my riskier small cap plays. I love the fact that the economics of this business are so sweet. How many FTSE 100 companies have gross margin north of 60% and a net income margin north of 20%? How many can genuinely offer LT defensive growth? Annual DPS in 2013 was 47p. In 2017 it was 62p. Net Debt in the interim was flat. Unlike so many others Diageo has not been gearing up to increase payouts to shareholders. It doesn't need to 'cause it's a cash machine. To the extent you haven't read it I highly recommend Lindsell Train's Insight series, in particular his Feb 2017 articles on "Confounding Compounding". The focus is on Unilever but it gives a great insight into why Diageo is such a great LT hold. I would argue this is the closest we have in the FTSE to a buy and forget share. Will it blow the lights out. No. But barring global prohibition it should deliver a more than respectable return in the LT. The current value is rich but by no means outrageous for such a high quality share. All IMHO

When the Time Tempus proclaims on a share -- good odds to play the other side....just saying. Article covers great bearish point, few of which I detract from -- but all of which are fully priced in. GLA

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