I have regularly considered Diageo (LSE: DGE) (NYSE: DEO.US) as a prospective investment.
However, one thing that has held me back in the past is Diageo’s high valuation. In particular, Diageo is currently trading at a historic P/E of 19.2, above the UK market average of 14.
What’s more, Diageo’s earnings per share are only expected to expand by 5% during the next financial year. In comparison, for the last 10 years Diageo’s earnings have grown at an average rate of 10%.
So at first glance Diageo looks expensive but is it worth it?
Well, to start with,…