LONDON -- Global premium-drinks company Diageo (LSE: DGE ) (NYSE: DEO ) has been a stellar investment over the years. Does this big blue chip have much further to rise, or are its growth days over? Let's have a look.
Track record
Diageo has delivered a storming performance for investors. In the last year, its shares have risen 30%. In the last five years, the shares have doubled. However, there are signs that this huge outperformance may be over. In the last three months, shares in this super-brewer have trailed the FTSE 100. While the FTSE is up 3.9%, Diageo is only 1.1% ahead.
What cannot be in doubt is Diageo's quality as a company. Shareholder dividends have been increasing every year since 1998. In fact, the payout is up nearly fourfold in that time. Sales and earnings per share have also increased year on year for the last five years. Diageo is one of the U.K.'s most successful companies.
Valuation
Go back two years, and Diageo shares were trading around 1,300 pence. The company had just completed a year in which it earned 68.3 pence per share and declared a dividend of 38.1 pence. That put the shares on a historic price-to-earnings ratio of 19 and a past yield of 2.9%. In May 2011, shares in Diageo traded at 15.7 times the full-year EPS. The 2011 dividend equated to a 3.1% yield.
Best Blue Chip Stocks To Watch For 2014: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Holly LaFon]
Company % of Assets Pepsico (PEP) 3.4 Philip Morris (PM) 2.3 Tesco PLC ADR (TSCO) 2.1 Molson Coors Brewing (TAP) 2.1 Microsoft (MSFT) 1.9 Merck (MRK) 1.9 Procter & Gamble (PG) 1.8 Avon Products (AVN) 1.6 Wal��art (WMT) 1.6 Medtronic 1.6 Hospira (HSP) 1.5 BP (BP) 1.4 Medco Health Solutions (MHS) 1.3 Johnson & Johnson (JNJ) 1.3 Unilever NV (UL) 1.3
Jeff is also optimistic about natural gas and believes the recession in Europe could be setting up "a generational buying opportunity." - [By Jacob Roche]
A recent report from research group KPMG, and commissioned by Philip Morris (NYSE: PM ) , revealed that while total consumption of cigarettes in Europe has fallen in recent years, the illegal contraband and counterfeit trade has grown from 8.3% of total consumption to 11.1%. The report suggests that the high profitability and low risk of penalties attracts organized crime, which can use the trade as a cash cow to fund far more objectionable activities. An ad from British American Tobacco (NYSEMKT: BTI ) goes as far as to suggest that the trade could even be indirectly funding terrorism.
- [By Fede Zaldua]
Imperial trades cheaply and pays a great, sustainable and for-ever-growing 4.5% cash dividend yield. The company's 2014 10.4 times P/E multiple represents a 40% discount to what most European consumer staples sell for. Besides, the owner of brands such as Davidoff and Gauloises, trades at a much more conservative level than its direct tobacco peers. Philip Morris International (PM) and British American Tobacco (BTI) sell for 2014 15 and 14.2 times earnings, respectively.
Best Blue Chip Stocks To Watch For 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By Jason Moser]
MasterCard's share of electronic payments
This represents the share of the 15% of transactions that are already in electronic form. On the one hand, according to the Nilson Report competitor Visa (NYSE: V ) holds about 63% share versus MasterCard's 31%. But when we consider that MasterCard's network has the capacity to handle more than 160 million transactions per hour, and only runs at about 80% capacity per day, there is obviously room to grow, and that is what management is doing. CFO Martina Hund-Mejean put it bluntly: "Look, we are looking at ourselves as a growth company, and obviously all of our investments that we are doing are really pointed to make sure that the top line continues to grow."�
Top 5 Warren Buffett Stocks To Own For 2014: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.
Advisors' Opinion:- [By Douglas A. McIntyre]
Oracle (NASDAQ: ORCL) CEO Larry Ellison will use just about any excuse he can to brag about the company he founded. He discovered a new path, as Oracle used IBM’s (NYSE: IBM) earnings release to claim that the century old corporation had fallen to the No.3 spot in global software sales. �If so, that would mean Oracle now holds the No.2 spot behind Microsoft (NASDAQ: MSFT). The change in positions says a great deal about the power of Oracle’s enterprise customer base, and the erosion of some of IBM’s core businesses.
- [By Shauna O'Brien]
Barclays Capital reported on Monday that it has cut its rating on International Business Machines Corp. (IBM).
The firm has downgraded IBM from “Overweight” to “Equal-Weight,” and has cut its price target from $215 to $190. This new price target suggests a 15% increase from the stock’s current price of $182.50.
An analyst from the firm noted: ��t is increasingly clear to us that investors will evaluate IBM on cash flow more than earnings until revenue starts to grow meaningfully. As a result, we are moving our rating for IBM to Equal Weight from Overweight even though shares have been down over the past several months. The mainframe ��atalyst’ has passed and positive benefits from analytics seem to be offset by secular shits to SaaS and Cloud, which seem to adversely impact all of IBM’s segments in some way. We have recently performed several surveys that show the disruptive impact of cloud and SaaS are only in the early innings and are set to be more disruptive in 2014 for our whole sector.��/p>
IBM shares were down $1.70, or 0.92%, during Monday morning trading. The stock has been mostly flat YTD.
- [By Paul Ausick]
Dell Inc. (NASDAQ: DELL) posted its highest-ever share of the global server market — 18.8% — as competitors International Business Machines Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ) both lost share. That s the good news for Dell; the bad news is that the worldwide market is shrinking.
- [By Anders Bylund]
Destroy, build, destroy
This last one is a head-scratcher for me. IBM (NYSE: IBM ) reported weak first-quarter sales this week, hampered by the sequester and government upheaval in China. OK, these things happen -- not very often, but that's life.
Best Blue Chip Stocks To Watch For 2014: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Ong Kang Wei]
Another example of such a product is Colgate-Palmolive (CL)'s Colgate toothpaste. I do not think I have to elaborate much here. Toothpaste is needed in our everyday life, and we will definitely have to buy more toothpaste after we have finished using a packet of it, ensuring that Colgate gets more and more sales over the years.
- [By Wallace Witkowski]
Other earnings highlights in the coming week include Dow components McDonald�� Corp. (MCD) , DuPont (DD) , AT&T Inc. (T) , and Procter & Gamble Co. (PG) . Notable S&P 500 companies include Halliburton Co. (HAL) , Netflix Inc. (NFLX) �, Amgen Inc. (AMGN) �, TripAdvisor Inc. (TRIP) �, Amazon.com Inc. (AMZN) �, Colgate-Palmolive Co. (CL) �, Ford Motor Co. (F) �, Dow Chemical Co. (DOW) �, and United Parcel Service Inc. (UPS) �
Best Blue Chip Stocks To Watch For 2014: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.
Advisors' Opinion:- [By Oil and Gas Investments Bulletin]
But with all the majors who've signed up for Canadian LNG -- Chevron (CVX), Apache (APA), Shell (RDS.A), BP (BP), and most recently Malaysian major Petronas (PNADF.OB) announcing it will invest $20 billion to develop its Pacific Northwest LNG project near Prince Rupert -- we're talking about a development almost unprecedented in our petroleum sector.
- [By Sara Murphy]
Joe also discusses particular risks to offshore oil rigs in the Gulf of Mexico. BP (NYSE: BP ) will have six rigs under firm contract there by December 2014, more than any other operator. Shell (NYSE: RDS-A ) will come in second with five rigs. Anadarko Petroleum (NYSE: APC ) is expected to have four operating rigs by then, followed by Chevron (NYSE: CVX ) with three under firm contract and ExxonMobil (NYSE: XOM ) (NYSE: XOM ) with two. Watch the following video to learn how climate change could affect these companies.
- [By Kelley Wright]
Based on this criteria, here are our current Timely Ten selections:
Chevron Corp. (CVX)��ielding 3.3%
CVS Caremark (CVS)��ielding 1.6%
Coca-Cola (KO)��ielding 2.9%
Baxter International (BAX)��ielding 3.0%
Walgreen (WAG)��ielding 2.3%
McDonalds Corp. (MCD)��ielding 3.3%
PepsiCo (PEP)��ielding 2.8%
ExxonMobil (XOM)��ielding 2.9%
Occidental Petroleum (OXY)��ielding 2.7%
Wal-Mart Stores (WMT)��ielding 2.5%
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Best Blue Chip Stocks To Watch For 2014: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Michael A. Robinson]
We're seeing a very similar story over at Apple Inc. (Nasdaq: AAPL). Last year, new CEO Tim Cook decided to use some of the i-Device pioneer's $100 billion cash hoard to pay a special dividend to shareholders. That $2.65 payout worked out to a 1.8% yield.
- [By Anders Bylund]
The road to riches in the smartphone industry is littered with broken bodies. Nokia (NYSE: NOK ) and BlackBerry (NASDAQ: BBRY ) are fighting for their lives. Mighty Microsoft can hardly find a toehold in the tablet and smartphone spaces. The Motorola Mobility purchase has become a burdensome albatross for Google (NASDAQ: GOOG ) . Even Apple's (NASDAQ: AAPL ) market-leading growth and profitability are slowing down.
- [By Evan Niu, CFA]
Within the high-end consumer smartphone market, it's unambiguously a two-horse race between Apple (NASDAQ: AAPL ) and Samsung. On the enterprise and government side of things, the top two smartphone vendors still have their work cut out for them. BlackBerry (NASDAQ: BBRY ) still has a grip on those subsectors, but the Canadian smartphone maker is slipping.
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