The FTSE 100 is down by around a fifth over the same period, so this relative outperformance by Diageo, no matter how modest, still points to the defensive nature of the stock, particularly in light of how the various lockdowns hollowed out the global hospitality industry.
The reliability of the group’s revenues and cash flow has enabled it to crank up leverage to support an acquisitive business model. Net borrowing was equivalent to 157 per cent of shareholders’ funds at the group’s last year-end, a level that curiously enough falls into line with that of a number of the privatised utilities. This may suggest that we are as reliant on booze as we are on electricity or mains water.