Much focus is given by investors to companies which either have the fastest earnings growth, best performing shares, highest quality characteristics or cheapest valuation.

In doing so, they often forget to look at the middle ground which can still contain decent businesses that might be growing at slower speeds, but which are still providing attractive returns to investors over time.

Diageo (DGE) is the perfect example. It is often viewed by investors as a business slogging through mud, finding it harder with every step to grow at the same pace as younger, more vibrant consumer goods companies.

It started 2020 with disappointing news that organic net sales growth would be at the lower end of its 4% to 6% guidance range. The setback was blamed on volatility in India, Latin America and the Caribbean as well as its travel retail business.

Diageo has subsequently had to contend with the leisure sector going into reverse during Covid-19 which has affected its sales to pubs, restaurants, hotels and venues (the ‘on-trade’), not forgetting further pain for its travel retail operations.

Yet its latest trading update would suggest resilience, reflected in good US trading and investments in the spirits sector paying off. The at-home drinking market in various parts of the world remains robust and Diageo says the on-trade market is starting to recover.

Investors taking a long-term view of the business should be reassured by the update and the £27 share price looks a good opportunity to buy into a business with a rich portfolio of brands.

In January Diageo was trading around £33 so the stock has since fallen by more than a fifth in value. Some of that valuation change is justified by the sales growth being knocked off course. Analyst forecasts imply the FTSE 100 company now won’t surpass pre-pandemic revenue levels until its financial year ending June 2023.

However, investing is about taking a long-term view of a company’s capabilities, not what it might do in the short-term. Diageo is big in spirits and that market has an attractive growth outlook.

Talking to Morningstar recently, Lindsell Train fund manager Nick Train said: ‘Diageo is the best collection of alcoholic beverage brands in one company that exists anywhere in the world.

‘Diageo shares today are down something like a quarter from their peak. That’s an incredible opportunity to invest in brands of the calibre of Guinness, Johnnie Walker or Tanqueray, because those brands are going to be around not just next year, but in fact, probably in 50 years.

‘And that’s sort of permanence and durability, that’s how you protect wealth and you continue to get rich steadily.’

Slow and steady can be better than fast and furious, particularly if a company is generating strong cash flows that can be reinvested back into the business to keep it competitive.

Diageo has delivered 11.5% annualised total return over the past 10 years, according to SharePad. That’s not only better than the 5.1% annualised total return from the FTSE All-Share on the same timeframe, but also beating the S&P 500’s 11.1%. A good whisky should be savoured and not gulped down for instant gratification. Much the same as Diageo as an investment.

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