Toast Spectacular Returns With Diageo plc & Marston’s PLC!

Today I am looking at two alcohol giants expected to deliver splendid shareholder returns.

Fermenting fantastic sales growth

I believe that pub operator Marston’s (LSE: MARS) is a terrific bet for those seeking solid earnings growth as drinker demand bubbles higher.

Shares were recently up 5% in Tuesday business after the firm released yet another positive trading update. Marston’s advised that sales hit record levels for the fourth consecutive year during the Yuletide period, with sales on Christmas Day breaching the £3m marker for the first time. Total like-for-like sales grew 3% in the 16 weeks to January 23rd, speeding up from 2.5% a year before.

As well as reaping the fruits of surging demand for its established and freshly-introduced ales, the brewer’s pub restructuring drive is also providing meaty rewards. And promisingly Marston’s plans to open another 20 pub-restaurants and five lodges in the current financial year alone.

The number crunchers expect Marston’s to enjoy a 6% earnings rise in the year to June 2016, resulting in a very attractive P/E rating of 12.7 times. And when you also factor in a market-bashing dividend yield of 4.2%, I believe the firm is a great bet for value-hungry growth seekers.

Ride the drinks juggernaut

Fears over the impact of emerging market cooling on drinkers’ spending power continues to hamper investor appetite for Diageo (LSE: DGE). On top of this, the drinks giant’s battle against adverse currency movements is also adding a further layer of worry for the market.

These concerns saw Diageo’s share price dribble 7% lower during the course of 2015 in oft-choppy trading. But I believe investors are missing a trick here as the company’s long-term profits potential remains strong, regardless of the prospect of any near-term revenue pressures.

Few companies can boast the terrific brand power enjoyed across Diageo’s product portfolio. Labels like Johnnie Walker whisky, Smirnoff vodka, Guinness stout and Baileys liquor gives the London firm market-leading positions in a plethora of beverage sub-segments.

And the power of these brands — helped by Diageo’s vast investment in marketing — helps the business to lift prices even in times of wavering consumer spending clout, providing the firm with terrific earnings visibility regardless of the wider economic climate.

On top of this, Diageo clearly sees the resplendent rewards on offer from developing regions and remains committed to bolstering its exposure to these territories. The company increased its stake in both Guinness Nigeria and Guinness Ghana during the autumn, while Diageo also acquired Mexico’s Tequila Don Julio and took control of South Africa’s United National Breweries in 2015.

The City expects Diageo to bounce from earnings declines of 7% in both 2014 and 2015 with a modest 1% earnings bounce in the 12 months to June 2016. Sure, a subsequent P/E rating of 21.3 times may appear a tad heady at face value. But I believe the quality of Diageo’s market-leading labels, not to mention expanding global presence, fully justifies this slight premium.

But whether or not you share my bullish take on Diageo and Marston's, I strongly recommend you check out this totally exclusive report that singles out even more FTSE-listed winners waiting to kick-start your investment income.

Our "5 Dividend Winners To Retire On" wealth report highlights a selection of incredible stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical and utilities plays that we are convinced should continue to provide red-hot dividends.

Click here to download the report -- it's 100% free and comes with no further obligation.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.