Down 55%, is now the time to buy Diageo shares for my ISA?

Down 55%, Is Now the Time to Buy Diageo Shares for My ISA?

Diageo shares, now at a 10-year low, look very inexpensive and offer an attractive dividend yield. Since early 2022, Diageo (LSE:DGE) shares have dropped over 50% in value. Meanwhile, the FTSE 100 index has risen by about 30%, meaning investors could have found better returns elsewhere in the market.

I speak from personal experience, having owned Diageo shares in my Stocks and Shares ISA until early this year. After selling, the shares have fallen another 27%, making them even cheaper and pushing the dividend yield higher.

Should Diageo Be Back in Your Portfolio?

The company boasts a remarkable portfolio of global brands, including Johnnie Walker, Tanqueray, Gordon’s, Smirnoff, Don Julio, Baileys, and the iconic Guinness. Simply naming a few of these well-known brands raises the question of why the stock has plunged 55% in under four years.

“Nobody seems to be sure why exactly sales across the alcohol industry are in the doldrums.”

This uncertainty is crucial in determining if there is a promising buying opportunity with Diageo shares.

Key Points to Consider

Diageo shares have significantly underperformed compared to the FTSE 100 since 2022.
The stock price has continued to fall even after I exited my position, making shares cheaper and dividends more attractive.
The company’s portfolio includes some of the world’s leading and enduring alcohol brands.
The reasons behind the current decline in alcohol sales and share price remain unclear.

Author's summary: Despite a 55% drop, Diageo's impressive brand lineup and rising dividends pose an intriguing but uncertain investment opportunity amid industry-wide challenges.

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Fool UK — 2025-11-04