Fool.com analyst Austin Smith reports onĀ 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.

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.