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How to buy Diageo shares (DGE)
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This page guides you through the most important information about Diageo. We cover the company’s history, its investment outlook for the future, and some tips on the different ways to invest.
Compare the best Diageo trading platforms
If you don’t want to hang around and are ready to invest, click one of the links in the table below. These are some of the best broker options available and we have tested them all extensively. To keep learning about Diageo, scroll down.
How to buy Diageo stock, a step-by-step guide
We have broken down the process of investing in Diageo into 5 easy-to-follow steps to help you get started.
- Choose a broker. The first thing you need is an online broker. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure, or check out our trading apps page.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Diageo shares.
- Place an order for DGE stock. Search for Diageo’s ticker symbol (DGE) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you want and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Diageo shares will be listed in your account. Congratulations, you’ve just bought shares in Diageo!
What is Diageo? And should I invest?
Formed back in 1997 and listed on the London Stock Exchange, Diageo produces alcohol and distributes it in more than 180 countries around the world. Its portfolio of beverages contains some of the world’s biggest names, such as Smirnoff vodka, Baileys liqueur, Captain Morgan rum, and Guinness beer.
The company regularly spends big money on the acquisition of smaller brands, such as George Clooney’s tequila brand, Casamigos, for $1 billion. Its strategy is to own some of the world’s most famous drinks, securing a consistent and loyal consumer base. The company’s largest revenue comes from scotch, followed by beer, and then by vodka.
It has a vast production and distribution network. This includes 29 distilleries in Scotland, a brewery in Dublin and a number of maturation and packaging facilities, 10 production facilities in North America, 12 breweries in Africa, 20 manufacturing facilities in India, and distilleries in China and Australia.
How has the company performed in recent years?
Its share price has been fairly static this year. This has likely been driven by a reduction in profits caused by COVID-19’s impact on social events and, therefore, alcohol demand internationally. However, this looks set to change as the world emerges from lockdowns and picks up the bottle once again.
The company pays a dividend with a reasonable yield of 2.35%, meaning that long-term investors have experienced modest returns. As a result, Diageo is a stock that can generate value for investors in different ways; you can hold it in the hope it rises in value while you enjoy a steady, stable stream of capital.
To create meaningful growth, further expensive acquisitions and creative marketing campaigns will be necessary, though the underlying value of Diageo’s portfolio is hard to ignore. It is clearly the market leader in this space, and it is difficult to foresee a world in which its rivals manage to muscle in on its market share significantly.
Is it a good time to buy Diageo shares now?
The answer to this question is entirely dependent on your own investment goals and personal beliefs. For example, if you believe the alcohol market will be on the up in coming years, holding it for the long term could be a prudent decision.
For those who want to make faster returns, trading could be a good way to attaining value. If you can spot a trend in Diageo’s market performance, the alcohol sector, or even the market as a whole, you may be able to take advantage of the price movements by being one step ahead of everyone else.
To give you something of a leg-up on the competition, feel free to check out our recent analysis of Diageo below. These articles help inform you about the latest developments and what they mean for the company.
Buying, selling and trading Diageo shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Diageo shares.
- Research the company. You should always examine the fundamentals of a company first. What is Diageo? How did the company get its start? How did it grow? Is Diageo’s revenue and profit growth picking up? Is the company innovating? The more you know about Diageo, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before you start investing in the stock market, make sure you have an understanding of what the market is how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Use our reviews to find the right platform or app for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. While if the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Follow the news to stay on top of the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Diageo shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for Diageo stock, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Diageo shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for the long term, hoping to benefit from the company growing steadily throughout. Or, if you see that Diageo’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Diageo shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to flip stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into DGE shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, use our trading course and read our guide to CFD trading to get you up to speed.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as cryptocurrency and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to fund your account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
Latest Diageo news
Top 3 FTSE 100 stocks to buy the dip in
Diageo PLC is a buy at $189, set to test $220 before setting a new high
Diageo CEO: ‘we feel good about navigating inflationary environment’
Diageo’s pre-tax profit tanks over 50% in fiscal 2020
UK shares end lower as COVID-19 cases rise globally
Diageo suspends share buybacks and withdraws full-year guidance on Coronavirus uncertainty
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