5-Star Stocks Poised to Pop: Diageo

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, alcoholic beverage giant Diageo (NYS: DEO) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Diageo's business and see what CAPS investors are saying about the stock right now.

Diageo facts

Headquarters (Founded)London (1886)
Market Cap$55.4 billion
IndustryDistillers and vintners
Trailing-12-Month Revenue$15.5 billion
ManagementCEO Paul Walsh (since 2000)
CFO Deirdre Mahlan (since 2010)
Return on Equity (Average, Past 3 Years)40.3%
Cash/Debt$2.5 billion / $12.9 billion
Dividend Yield3.7%
CompetitorsBeam
Constellation Brands
Brown-Forman

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 2,437 members who have rated Diageo believe the stock will outperform the S&P 500 going forward.

Earlier this month, one of those Fools, Naxias, nicely summed up the Diageo bull case:

This company sells some very nice, well-respected brands including Baileys, Captain Morgan, Guinness, and Smirnoff. Armed with these brands and distribution rights, it generates solid and growing revenues with a good margin. Its debt load is workable and slightly on the decline. Cash flow has increased during the recession, which is always good to see. And it pays a dividend around 3%. It's in good spirits, you could say.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Diageo. Motley Fool newsletter services have recommended buying shares of Diageo and Beam. 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 Fool's disclosure policy always gets a perfect score.

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