DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DEO - US25243Q2057 - ADR
86.64 USD
+0.04 (+0.05%)
Taking everything into account, DEO scores 5 out of 10 in our fundamental rating. DEO was compared to 32 industry peers in the Beverages industry. There are concerns on the financial health of DEO while its profitability can be described as average. DEO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DEO had positive earnings in the past year.
In the past year DEO had a positive cash flow from operations.
DEO had positive earnings in each of the past 5 years.
In the past 5 years DEO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of DEO (4.77%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 21.23%, DEO is in the better half of the industry, outperforming 71.88% of the companies in the same industry.
The Return On Invested Capital of DEO (8.31%) is comparable to the rest of the industry.
DEO had an Average Return On Invested Capital over the past 3 years of 11.21%. This is in line with the industry average of 11.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.77% | ||
| ROE | 21.23% | ||
| ROIC | 8.31% |
ROA(3y)7.73%
ROA(5y)8.08%
ROE(3y)34.97%
ROE(5y)37.03%
ROIC(3y)11.21%
ROIC(5y)11.47%
1.3 Margins
DEO's Profit Margin of 11.63% is fine compared to the rest of the industry. DEO outperforms 71.88% of its industry peers.
In the last couple of years the Profit Margin of DEO has remained more or less at the same level.
The Operating Margin of DEO (21.41%) is better than 75.00% of its industry peers.
In the last couple of years the Operating Margin of DEO has declined.
DEO has a Gross Margin of 60.13%. This is amongst the best in the industry. DEO outperforms 87.50% of its industry peers.
DEO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.41% | ||
| PM (TTM) | 11.63% | ||
| GM | 60.13% |
OM growth 3Y-11.65%
OM growth 5Y-6.79%
PM growth 3Y-17.92%
PM growth 5Y-0.61%
GM growth 3Y-0.67%
GM growth 5Y-0.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DEO is creating some value.
The number of shares outstanding for DEO remains at a similar level compared to 1 year ago.
The number of shares outstanding for DEO has been reduced compared to 5 years ago.
DEO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.03 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
DEO's Altman-Z score of 2.03 is in line compared to the rest of the industry. DEO outperforms 46.88% of its industry peers.
The Debt to FCF ratio of DEO is 8.78, which is on the high side as it means it would take DEO, 8.78 years of fcf income to pay off all of its debts.
DEO has a Debt to FCF ratio (8.78) which is comparable to the rest of the industry.
DEO has a Debt/Equity ratio of 1.88. This is a high value indicating a heavy dependency on external financing.
DEO has a worse Debt to Equity ratio (1.88) than 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.03 |
ROIC/WACC1.14
WACC7.31%
2.3 Liquidity
A Current Ratio of 1.63 indicates that DEO should not have too much problems paying its short term obligations.
The Current ratio of DEO (1.63) is comparable to the rest of the industry.
A Quick Ratio of 0.64 indicates that DEO may have some problems paying its short term obligations.
The Quick ratio of DEO (0.64) is worse than 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
DEO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.65%.
DEO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.59% yearly.
DEO shows a decrease in Revenue. In the last year, the revenue decreased by -0.12%.
DEO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.49% yearly.
EPS 1Y (TTM)-8.65%
EPS 3Y-6.76%
EPS 5Y3.59%
EPS Q2Q%-7.14%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
3.2 Future
DEO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.07% yearly.
DEO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.91% yearly.
EPS Next Y2.98%
EPS Next 2Y4.21%
EPS Next 3Y5%
EPS Next 5Y7.07%
Revenue Next Year-3.03%
Revenue Next 2Y0.1%
Revenue Next 3Y1.32%
Revenue Next 5Y2.91%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.21, DEO is valued correctly.
81.25% of the companies in the same industry are more expensive than DEO, based on the Price/Earnings ratio.
DEO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.77.
DEO is valuated correctly with a Price/Forward Earnings ratio of 12.82.
Based on the Price/Forward Earnings ratio, DEO is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 23.35. DEO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.21 | ||
| Fwd PE | 12.82 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 65.63% of the companies listed in the same industry.
DEO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DEO is cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.8 | ||
| EV/EBITDA | 11.34 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DEO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.44
PEG (5Y)3.68
EPS Next 2Y4.21%
EPS Next 3Y5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.99%, DEO is a good candidate for dividend investing.
DEO's Dividend Yield is rather good when compared to the industry average which is at 1.69. DEO pays more dividend than 96.88% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, DEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.99% |
5.2 History
On average, the dividend of DEO grows each year by 8.14%, which is quite nice.
DEO has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of DEO decreased in the last 3 years.
Dividend Growth(5Y)8.14%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
DEO pays out 97.62% of its income as dividend. This is not a sustainable payout ratio.
The dividend of DEO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP97.62%
EPS Next 2Y4.21%
EPS Next 3Y5%
NYSE:DEO (12/31/2025, 9:45:55 AM)
86.64
+0.04 (+0.05%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners63.72%
Inst Owner Change-0.38%
Ins Owners0.06%
Ins Owner ChangeN/A
Market Cap48.16B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.25
Price Target116.93 (34.96%)
Short Float %0.36%
Short Ratio1.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.99% |
Yearly Dividend1.03
Dividend Growth(5Y)8.14%
DP97.62%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.65%
PT rev (3m)-10.08%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-3.56%
EPS NY rev (3m)-4.06%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-3.61%
Revenue NY rev (3m)-3.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.21 | ||
| Fwd PE | 12.82 | ||
| P/S | 2.38 | ||
| P/FCF | 17.8 | ||
| P/OCF | 11.15 | ||
| P/B | 4.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.34 |
EPS(TTM)6.56
EY7.57%
EPS(NY)6.76
Fwd EY7.8%
FCF(TTM)4.87
FCFY5.62%
OCF(TTM)7.77
OCFY8.97%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)4.44
PEG (5Y)3.68
Graham Number54.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.77% | ||
| ROE | 21.23% | ||
| ROCE | 11.23% | ||
| ROIC | 8.31% | ||
| ROICexc | 8.94% | ||
| ROICexgc | 15.19% | ||
| OM | 21.41% | ||
| PM (TTM) | 11.63% | ||
| GM | 60.13% | ||
| FCFM | 13.37% |
ROA(3y)7.73%
ROA(5y)8.08%
ROE(3y)34.97%
ROE(5y)37.03%
ROIC(3y)11.21%
ROIC(5y)11.47%
ROICexc(3y)11.83%
ROICexc(5y)12.24%
ROICexgc(3y)20.56%
ROICexgc(5y)21.89%
ROCE(3y)15.27%
ROCE(5y)15.6%
ROICexgc growth 3Y-14.98%
ROICexgc growth 5Y-6.83%
ROICexc growth 3Y-12.89%
ROICexc growth 5Y-4.5%
OM growth 3Y-11.65%
OM growth 5Y-6.79%
PM growth 3Y-17.92%
PM growth 5Y-0.61%
GM growth 3Y-0.67%
GM growth 5Y-0.09%
F-Score4
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Debt/EBITDA | 3.44 | ||
| Cap/Depr | 93.83% | ||
| Cap/Sales | 7.96% | ||
| Interest Coverage | 4.42 | ||
| Cash Conversion | 71.34% | ||
| Profit Quality | 114.95% | ||
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 2.03 |
F-Score4
WACC7.31%
ROIC/WACC1.14
Cap/Depr(3y)169.79%
Cap/Depr(5y)156.38%
Cap/Sales(3y)7.44%
Cap/Sales(5y)6.86%
Profit Quality(3y)77.05%
Profit Quality(5y)86.47%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.65%
EPS 3Y-6.76%
EPS 5Y3.59%
EPS Q2Q%-7.14%
EPS Next Y2.98%
EPS Next 2Y4.21%
EPS Next 3Y5%
EPS Next 5Y7.07%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
Revenue Next Year-3.03%
Revenue Next 2Y0.1%
Revenue Next 3Y1.32%
Revenue Next 5Y2.91%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year12.59%
EBIT Next 3Y7.32%
EBIT Next 5Y4.75%
FCF growth 1Y5.5%
FCF growth 3Y-11.02%
FCF growth 5Y10.81%
OCF growth 1Y5.96%
OCF growth 3Y-6.76%
OCF growth 5Y13.23%
DIAGEO PLC-SPONSORED ADR / DEO FAQ
What is the fundamental rating for DEO stock?
ChartMill assigns a fundamental rating of 5 / 10 to DEO.
What is the valuation status for DEO stock?
ChartMill assigns a valuation rating of 6 / 10 to DIAGEO PLC-SPONSORED ADR (DEO). This can be considered as Fairly Valued.
Can you provide the profitability details for DIAGEO PLC-SPONSORED ADR?
DIAGEO PLC-SPONSORED ADR (DEO) has a profitability rating of 6 / 10.
Can you provide the financial health for DEO stock?
The financial health rating of DIAGEO PLC-SPONSORED ADR (DEO) is 3 / 10.
How sustainable is the dividend of DIAGEO PLC-SPONSORED ADR (DEO) stock?
The dividend rating of DIAGEO PLC-SPONSORED ADR (DEO) is 6 / 10 and the dividend payout ratio is 97.62%.