1 Great Company I Wouldn't Buy Today

Fool.com analyst Austin Smith reports on Diageo, which he says is a great company, but not one he'd buy. Although CEO Paul Walsh promises that he won't "spend money frivolously on acquisitions," his company is in talks to shell out $3 billion for Jose Cuervo, and it has a growing appetite for both spirits and emerging markets.

Many investors like Diageo for its 2.4% dividend, 60% gross margin, and three-year revenue growth rate that's better than those of its competitors. But even if Diageo is keeping an eye on prudent spending, it's still too expensive. Austin has more in the following video.

Though Austin has his concerns about Diageo, there are comparable companies worth looking into. If you're seeking some long-term investing ideas, we invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.

Editor's note: In the video, Austin incorrectly stated that Diageo had already purchased Jose Cuervo, but the acquisition hasn't closed yet and the company appears to be in advanced talks with the Beckmann family. The Fool regrets the error.

Austin Smith owns shares of The Coca-Cola Company and PepsiCo. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend Diageo plc (ADR), The Coca-Cola Company, Monster Beverage, PepsiCo, and Molson Coors Brewing Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2069632, ~/Articles/ArticleHandler.aspx, 7/28/2014 3:12:49 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement