Market Overview

Diageo and National Beverages to Open Near 52-Week Highs

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Lots of stocks hit 52-week highs yesterday as the markets rose. Among them were Diageo (NYSE: DEO), maker of Smirnoff, Captain Morgan and Guinness, and National Beverage (NASDAQ: FIZZ), whose brands include Shasta, EverFresh and LaCroix. Their share prices reached $85.88 and $17.13 per share, respectively, in Monday's trading session.

Diageo has seen its marketing push into Africa yield results. It recently renewed an agreement with Southern Wine and Spirits and also won bidding to acquire the final state brewery in Ethiopia. The London-based global spirits, beer and wine purveyor owns eight of the world's top 20 liquor brands. Founded in 1886, Diageo now has a market cap of $53.5 billion.

While its price-to-earnings ratio is higher than the industry average, so is Diageo's operating margin. The return on equity is 41.1% and the dividend yield is 3.1%. Four of five analysts consider it a Buy or Strong Buy and they have a mean price target of $89.53 per share. The share price is about 19% higher than at the beginning of the year. The stock has outperformed competitors Anheuser-Busch (NYSE: BUD) and Constellation Brands (NYSE: STZ) over that time.

National Beverages recently announced plans for the use of more independent distributors to expand penetration into convenience stores and other small retailers. It also increased unit prices, which helped boost revenue in the most recent quarter. Ft. Lauderdale-based National Beverages produces and markets soft drinks, juices and energy drinks for both retailers and beverage companies. Its market cap is $787.5 million. It was founded in 1985.

The P/E ratio is higher than the industry average but projected to fall. The long-term EPS growth forecast is only 6.0%, but the company has a return on equity of 32.9%. The share price is more than 29% higher year to date, and it is up more than 9% in the past month. The stock has also outperformed those of soft drink giants Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) over the past six months.

Posted-In: 52-Week Highs Anheuser-Busch beverage stocks Coca-colaLong Ideas Short Ideas Pre-Market Outlook Trading Ideas

 

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