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.