Down 55%, is now the time to buy Diageo shares for my ISA?
Diageo shares (LSE: DGE) have plunged to a 10-year low, dropping over half their value since early 2022. During the same period, the FTSE 100 index rose by approximately 30%, meaning investors could have earned higher returns by choosing other stocks.
I speak from personal experience, having held Diageo shares in my Stocks and Shares ISA until earlier this year. Since I sold, the shares have fallen an additional 27%, making their current price seem very attractive, especially with the increased dividend yield.
World-class brand portfolio
Diageo owns a remarkable lineup of global brands, including:
- Johnnie Walker
- Tanqueray
- Gordon’s
- Smirnoff
- Don Julio
- Baileys
- Guinness
This list is far from exhaustive, which raises the question of why the shares have lost 55% of their value in less than four years.
Market uncertainty
“Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums.”
This uncertainty underpins the challenge in determining whether Diageo shares represent a highly profitable buying opportunity at present.
Investor considerations
- Shares are currently priced at a significant discount.
- Dividend yields have increased due to falling share prices.
- The brand portfolio remains strong and diverse.
- Industry-wide sales weakness adds risk and unpredictability.
Investors must weigh the potential for future recovery against ongoing market challenges.
Would you like the summary to be more optimistic or neutral in tone?