BEAM Inc (BEAM), Brown-Forman Corporation (BF.B), Diageo plc (ADR) (DEO): If You Want to Make the Most Money, Buy the Best Liquor

Can the best really be the least expensive too?

Johnny Walker is the number one selling brand of scotch in the world, according to Top 5 of Anything, and sells more than 2.5 times as many cases as its closest competitor. But when it comes to top global brands, Johnny Walker fits right in with the rest of Diageo plc (ADR) (NYSE:DEO)’s brands. It is nothing short of astonishing that one company has assembled this magnificent assortment of names under one parent.

Not only has Diageo plc (ADR) (NYSE:DEO) assembled a stellar brand portfolio, it provides investors with the lowest PEG ratio of the three at 1.7, based on 2014 consensus earnings projections and the five year projected growth rate of 10.3%. But just because the company looks good in these areas doesn’t mean it can’t look even better. The stock currently pays a solid 2.34% dividend yield that only requires a payout ratio of 44% to cover, which makes it appear to be very sustainable. This business is also run by a management team that knows how to produce bottom line results with the spectacular brands they have assembled. Returns on equity, assets and capital have averaged 41.6%, 10% and 13.9%, respectively, over the last five years, a stellar record of performance.

A final toast to successful investing

While all three of these businesses have built strong brand portfolios and appear to be well-run, solid businesses, Diageo plc (ADR) (NYSE:DEO) stands out as a potential investment opportunity given its current comparative valuation and unmatched portfolio of top brands across so many market segments. It is almost difficult to believe that the strongest portfolio of brands is also the most inexpensively priced stock.

Investors who buy Diageo plc (ADR) (NYSE:DEO) today will be able to toast their success with a bottle of Korbel champagne from Brown-Forman Corporation (NYSE:BF.B) or a nice Courvoisier cognac from BEAM Inc (NYSE:BEAM) by using just a small portion of the profits they will enjoy for years into the future.

The article If You Want to Make the Most Money, Buy the Best Liquor originally appeared on Fool.com and is written by Ken McGaha.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.