5-Star Stocks Poised to Pop: Diageo

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Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, alcoholic-drink distributing giant Diageo (NYSE: DEO) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Diageo's business and see what CAPS investors are saying about the stock right now.

Diageo facts

Headquarters (founded)	London (1886)
Market Cap	$30.32 Billion
Industry	Wineries and Distillers
Trailing-12-Month Revenue	$13.11 Billion
Management	CEO Paul Walsh (Since 2000), CFO Nicholas Rose (Since 1999)
Major Brands	Smirnoff, Johnnie Walker, Captain Morgan, Guinness, Baileys
Trailing-12-Month Return on Equity	43.7%
Dividend Yield	3.3%
Competitors	Constellation Brands (NYSE: STZ), Fortune Brands (NYSE: FO)
CAPS members bullish on DEO also bullish on	Johnson & Johnson (NYSE: JNJ), Apple (Nasdaq: AAPL)
CAPS members bearish on DEO also bearish on	General Motors (NYSE: GM), Microsoft (Nasdaq: MSFT)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 2,127 of the 2,159 members who have rated Diageo -- some 98.5% -- believe the stock will outperform the S&P 500 going forward. These bulls include amassafortune and tenmiles, both of whom are ranked in the top 1% of our community.

In February, amassafortune tapped Diageo as tasty way to defend against the downturn: "During a recession, even if sales are down, high-quality brands of liquors still sell well without heavy discounting. Unsold inventory is more likely to appreciate than just about any other product or commodity."

In a pitch from January, tenmiles urged Fools to drink in Diageo's bargain-like price, which is even better today:

I like Diageo as a defensive play and likely market beater on a total return basis over the next few years. Valuation metrics are in line with its peer group. … Leadership positions within a wide variety of spirits; also has some "low end" lines, which should continue to do well if drinkers trade down. I hadn't realized until recently that they sell more Guinness in Africa than in Ireland. Worst case scenario -- their 10 year old Johnnie Walker inventory becomes 12 year old and they sell it for more profit -- seems like a good business model for these recessionary times.

What do you think about Diageo, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started!