- Diageo is a beverages sector dividend stock listed on the London and New York Stock Exchanges.
- Its largest market is North America, where it recorded strong sales and double-digit organic growth in the first half of 2021.
- The company has excellent cash flow generation capacity and a strong balance sheet.
Diageo plc is a multinational beverage alcohol company that operates in over 180 countries. The company was founded in 1886 and is headquartered in London.
The company has a primary listing on the London Stock Exchange (LSE: DGE) where it is part of the FTSE 100 Index. Diageo also has a secondary listing on the New York Stock Exchange (NYSE: DEO).
If you would like to buy shares in Diageo from Australia, here’s how.
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As a global leader in beverage alcohol, Diageo has a vast collection of brands across spirits and beer. It has production facilities at more than 150 sites across 30 countries. Many of the company’s brands have global recognition including Johnnie Walker, Smirnoff, Captain Morgan, Baileys, and Guinness, to name just a few.
Diageo subsidiaries include Guinness Brewery, United Spirits, and Casamigos among others.
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Step 1: Choose a broker
The first step is to choose an online broker. There are many brokers available online, offering a variety of options. When choosing a broker, you should consider key features such as:
- Access to the US market. Diageo is primarily listed on the London Stock Exchange, but has a secondary listing on the NYSE. Many share trading apps are limited to either Australian or US markets, so check which markets your broker has access to before opening an account.
- Commission-free trading. There are many US share trading platforms that offer commission-free trading. This means you won't pay commissions when trading shares.
- Fractional share investment. Fractional share investment refers to the ability to purchase a portion of a share instead of the whole thing.
- Simple-to-use trading platform. Investing in shares doesn't have to be complicated. Look for a platform that is easy to use.
- Research and reporting. Look for platforms offering detailed research on items such as company overview, price history and recommendations, and even price forecasts.
Step 2: Fund your trading account
Next, deposit funds into your account. If you just opened an account, it might take a few days for the funds to clear so you can trade.
Step 3: Decide how much to invest
By investing in fractional shares, you can invest the exact amount you want to. This allows you to start with a small investment.
Step 4: Decide whether to invest in an ETF or buy individual shares
ETFs are made up of shares in many different companies. Therefore, you can either own a share of the company or invest in them via an ETF. Active traders are less likely to be interested in these funds because they can't control where the money will go, but they're sometimes considered less risky.
ETFs with DEO exposure include Invesco International Dividend Achievers ETF (PID), AI Powered International Equity ETF (AIIQ), and Formidable ETF (FORH).
Step 5: Customise your order
Different order types can be used to customise what you buy and how much you pay. The most common types of orders are:
A market order is an order to purchase or sell shares instantly. The order will be executed immediately, but the price cannot be guaranteed.
With buy limit orders, the orders must be executed at or below the price specified. For example, if you want to purchase Diageo shares but will not go over US$200, submit a limit order for that amount.
You can use this type of order to sell your shares at a certain price or higher. Let's say you want to sell Diageo shares for US$210 per share. Your stop-limit order will be executed when the shares reach this price.
You decide the price at which it is worth selling your shares. Let's take, for instance, US$200 as your price at which to sell Diageo shares. Your stop loss order will be executed if the price falls to that level and your shares will be sold at the next available market price.
Step 6: Place your order
If you have chosen a broker, funded your account based on the amount you wish to invest, and determined how you want to invest in Diageo shares, then it is time to place the order. You will usually be able to do this by clicking a button.
Step 7: Monitor your investment
Once you buy shares in a company, it’s necessary to keep track of both share price movements and the company’s performance. This is true whether you are investing for the long term or with a speculative motive to benefit from price fluctuations.
Track Diageo’s performance
Diageo is a dividend-paying stock. Therefore, as well as the share price, it’s a good idea to track how the company performs in terms of financial fundamentals and dividend payouts.
Watch for developments in the beverages industry
Diageo operates in the beverages industry. Although at-home consumption increased during the pandemic, out-of-home consumption, which typically brings in better margins, was severely impacted. The food and beverages industry must also deal with possible long-term changes in customer behaviour and demand as a result of prolonged lockdowns.
Diageo’s key competitors include Bacardi, Pernod Ricard, Carlsberg, Molson Coors, Brown-Forman, Heineken, and Constellation Brands.
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