Down 55%, Is Now the Time to Buy Diageo Shares for My ISA?
Diageo shares have plunged to a 10-year low, dropping more than half their value since early 2022. Meanwhile, the FTSE 100 index climbed about 30%, meaning investors could have earned better returns with other stocks in the same index. I speak from experience, having owned Diageo shares in my Stocks and Shares ISA until early this year.
Since I sold, the shares have declined an additional 27%, making them even cheaper and boosting the dividend yield. This raises the question: should I consider adding Diageo back to my portfolio?
Strong Brand Portfolio
Diageo is known for owning a remarkable collection of world-renowned brands such as:
- Johnnie Walker
- Tanqueray
- Gordon’s
- Smirnoff
- Don Julio
- Baileys
- Guinness
Even this list, far from exhaustive, highlights the strength of the company’s portfolio, making the sharp drop in shares over four years puzzling.
Market Challenges
The key to deciding if this is a lucrative buying opportunity lies in understanding why sales across the alcohol industry remain subdued. So far, there is no clear explanation for the poor performance in this sector.
"Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums."
Despite the challenges, the increased dividend yield and low share price could make Diageo a compelling option for long-term investors.
Would you prefer a more detailed analysis or a concise investment summary?