Down 55%, Is It Time to Buy Diageo Shares for My ISA?
Diageo shares are currently at a 10-year low, dropping over half their value since early 2022. While this decline is significant, the FTSE 100 index has risen by about 30% in the same period, meaning investors could have gained more elsewhere. Speaking from personal experience, I held Diageo shares in my Stocks and Shares ISA until earlier this year. Since selling, the shares have fallen a further 27%, making them cheaper with a more attractive dividend yield.
Diageo's Strong Brand Portfolio
The company owns a remarkable collection of world-renowned brands, including:
- Johnnie Walker
- Tanqueray
- Gordon’s
- Smirnoff
- Don Julio
- Baileys
- Guinness
Just considering this impressive list raises the question of why Diageo's shares have dropped 55% in under four years.
Industry Challenges
It remains unclear why sales across the alcohol sector are struggling, which is crucial to determine if Diageo presents a highly profitable buying opportunity.
“Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums.”
Author's Summary
Diageo’s shares have dramatically dropped despite strong brands and an appealing dividend, leaving investors to weigh whether the current low prices signal a smart investment opportunity amid industry uncertainty.