Diageo plc, the beverage behemoth behind iconic brands like Johnnie Walker, Guinness, and Smirnoff, is a staple for many investors, especially those chasing dividends. This UKDividends analysis dives into its dividend yield over the last 5 years, share price trends, and whether it’s a good time to buy. We’ll also explore company tidbits and the future of the alcoholic beverage industry.
Dividend Yield History: A Steady Sip or a Bumpy Ride?
First, let’s pour over the dividend yields for the last 5 financial years, ending in June each year, as sourced from HL.co.uk. These are crucial for income-focused investors, and here’s the breakdown:
| 2020 | 2.6% |
| 2021 | 2.1% |
| 2022 | 2.2% |
| 2023 | 2.2% |
| 2024 | 3.1% |
The yields dipped a bit in 2021 and 2022, likely due to share price fluctuations, but bounced back to 3.10% in 2024. Currently, with the share price at approximately £21.00 (as of April 24, 2025, from HL.co.uk), and expecting a 5% increase in dividends for 2025 from 79.28p to around 83p (based on Diageo’s investor page), the estimated yield is ~ 3.9%
This history suggests Diageo is committed to its shareholders, even if the yield isn’t one of the highest in the FTSE 100.
Share Price Trends: From High Spirits to a Hangover?
Now, let’s examine the share price over 1 month, 1 year and 5 years.
We can see over the last month the stock has had a small uptick, and is holding quite stable. But this doesn’t tell the whole story.
Over the last year the stock has taken a bit of a beating, down near 26% overall. What about the 5 year trend?
The trending curve shows that the stock has lost near 23% in that timeframe. Given this, the share price seems lower than 5 years ago, potentially undervalued, but the recent decline over 1 year does warrant caution. Just how low will Diageo go? The 1-month increase is a glimmer of hope though, like finding an extra chip at the bottom of the bag.
Is Now a Good Time to Buy? Mixing Risk and Reward
So, is now a good time to buy Diageo for dividends? With a current yield of near 3.9% and a history of increases (up 5% annually, per dividendmax.com), it seems attractive, especially at a lower price. However, the beverage industry faces headwinds: health trends pushing for less alcohol, potential US tariffs and economic slowdowns affecting premium spirits. Diageo’s innovation, like non-alcoholic options, and global reach (sales in 180 countries, per Diageo.com), might buffer these, but risks remain.
Conclusion: A Dividend Stock Worth Toasting?
Diageo seems like a solid dividend stock for income seekers and it’s one I’m considering adding to my portfolio. With a current yield approaching 4%, the company has a recent history of dividend growth, especially at a lower share price.
The 5-year decline and 1-year drop suggest a bit of an undervalued stock, but the 1-month uptick is a positive note. However, industry challenges like health trends and tariffs mean it’s not a no-brainer. If you’re up for a bit of risk, it might be worth raising a glass to; just don’t expect a smooth ride.
Leave a Reply