Why I’d buy Diageo for more than its dividend

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Diageo (LSE: DGE) is a leading spirits and beer maker with a portfolio of well-known brands such as Smirnoff and Captain Morgan. Earlier in the year, Diageo shares fell due to the pandemic. Because of Covid-19-related lockdowns, people haven’t visited restaurants and bars as often and that’s hurt alcohol consumption. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Lately, however, shares have risen as optimism over Covid-19 vaccine candidates has increased. Tasty dividendOne reason why many investors like Diageo is its dividend. Thanks to great management execution and the company’s competitive advantages, Diageo has increased its annual total normal dividend every year for over two decades. Including this year’s dividend raise, the company now has a dividend yield of around 2.38% at current prices.Given the vaccine candidate optimism, I think the odds that Diageo will increase its dividend next year are also pretty high. While Diageo has a great dividend history, I think there’s a lot more to like about the company than the dividend. Here are two more reasons why I’d buy the stock:Leading brandsI like Diageo because the company has many leading brands. In this sector, brands can be pretty profitable when done correctly. One of Elon Musk’s side ventures is a great example of the profit potential of branding in the industry. Recently, Musk’s Tesla sold out of its very own liquor, Tesla Tequila. Enclosed in a very stylish looking bottle, Tesla Tequila cost $250. This was a steep price when a comparable bottle from another company could be bought for a fraction of that. To me, the ‘mark up’ illustrates the power of Musk and Tesla’s brand. To me, this also illustrates that the returns on capital in the liquor industry can be pretty decent given the right execution. In terms of the returns on capital, Diageo does pretty well in my opinion. According to Fidelity, Diageo had a return on equity of 34.52% and a return on invested capital of 16.39% for 2019. In 2012, the company had a return on equity of 35.30% and return on invested capital of 15.58%. For many investors, a stock with consistently high returns on capital can potentially illustrate a company with competitive advantages. Given great management and enough positive long-term trends, the stock could be a great holding. Emerging and developing markets Speaking of positive long-term trends, I like Diageo because the company has exposure to a number of emerging and developing markets. For the year ended 30 June 2020, for example, 19.3% of the company’s sales came from its Asia Pacific region. Another 11.5% came from Africa and 7.8% from Latin America and the Caribbean. With up and coming trends such as AI and 5G, I think productivity in emerging and developing markets could potentially rise faster than expected. With more productivity, incomes could rise. As the middle class grows, demand for the type of premium beer and liquor Diageo sells could outperform. Although Diageo doesn’t trade for a cheap valuation, I think the company’s growth potential outside the West makes the stock worth owning in the long run. It’s a stock I’d buy and hold for the long term.  “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. Jay Yao | Monday, 23rd November, 2020 | More on: DGE center_img Image source: Getty Images Why I’d buy Diageo for more than its dividend Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Jay Yaolast_img read more

Early-Stage Mortgage Delinquencies Dropped in Q4 2017

first_img According to the MBA’s Fourth Quarter 2017 National Delinquency Survey, general downward trends for mortgage delinquencies continued as 2017 wrapped up, even after the impact of a historically damaging hurricane season.”The 30-day delinquency rate actually dropped by 15 basis points in the fourth quarter of 2017, as homeowners affected by Hurricanes Harvey, Irma, and Maria either became current on their payments or moved to later stages of delinquency,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “However, while the earliest-stage delinquency rate dropped, the 60-day and 90-day delinquency rates did increase in the fourth quarter of 2017. Despite the hurricanes and these quarter-over-quarter results, most states are seeing overall mortgage delinquency rates at lower levels than a year ago.”According to the MBA survey, the percentage of loans in the foreclosure process at the end of the fourth quarter was 1.19 percent. This placed Q4 2017 down 34 basis points year-over-year, and down 4 basis points from Q3.Serious delinquency rates, covering loans that are 90 days or more overdue or actively in the process of foreclosure, increased 39 basis points between Q3 and Q4, hitting 2.91 percent for Q4 2017. However, that total is still 22 basis points lower than in Q4 2016.On a seasonally adjusted basis, however, mortgage delinquency rates did increase across all types of loans, including FHA, VA, and conventional.According to the latest Mortgage Monitor Report from the Data and Analytics Division of Black Knight, Inc., mortgage delinquencies hit a 23-month high as 2017 wrapped up, surging by 164,000 year-over-year. However, outside of hurricane-affected areas, Black Knight reported that the national mortgage delinquency rate was actually 11 percent below long-term norms. In these same areas, the total number of past-due or in-foreclosure homes dropped by more than 140,000 as December 2017 wrapped up.Last year also saw the fewest foreclosure starts nationwide of any year since 2000, with the annual total sitting at 649,000. Demand Propels Home Prices Upward 2 days ago Early-Stage Mortgage Delinquencies Dropped in Q4 2017 Demand Propels Home Prices Upward 2 days ago February 12, 2018 2,467 Views Previous: New York Buys Distressed Mortgages to Fight Zombie Homes Next: Quickening Mortgage Innovation in an Industry Slow to Change  Print This Post Foreclosures hurricane harvey Hurricane Irma Hurricane Maria hurricanes MBA Mortgage Delinquencies National Delinquency Survey 2018-02-12 David Wharton Tagged with: Foreclosures hurricane harvey Hurricane Irma Hurricane Maria hurricanes MBA Mortgage Delinquencies National Delinquency Survey Home / Daily Dose / Early-Stage Mortgage Delinquencies Dropped in Q4 2017 Related Articles Data Provider Black Knight to Acquire Top of Mind 2 days ago Share Save About Author: David Wharton Data Provider Black Knight to Acquire Top of Mind 2 days ago The Best Markets For Residential Property Investors 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago in Daily Dose, Featured, Foreclosure, Headlines, Journal, News Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Subscribelast_img read more