DIAGEO PLC-SPONSORED ADR (DEO)

US25243Q2057 - ADR

140.76  -0.03 (-0.02%)

After market: 140.76 0 (0%)

Fundamental Rating

5

DEO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. While DEO has a great profitability rating, there are quite some concerns on its financial health. DEO has a valuation in line with the averages, but it does not seem to be growing.



7

1. Profitability

1.1 Basic Checks

In the past year DEO was profitable.
DEO had a positive operating cash flow in the past year.
In the past 5 years DEO has always been profitable.
In the past 5 years DEO always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of DEO (8.68%) is better than 65.63% of its industry peers.
The Return On Equity of DEO (41.47%) is better than 96.88% of its industry peers.
DEO has a Return On Invested Capital of 13.24%. This is in the better half of the industry: DEO outperforms 65.63% of its industry peers.
DEO had an Average Return On Invested Capital over the past 3 years of 13.28%. This is in line with the industry average of 12.50%.
Industry RankSector Rank
ROA 8.68%
ROE 41.47%
ROIC 13.24%
ROA(3y)9.31%
ROA(5y)8.45%
ROE(3y)42.98%
ROE(5y)37.51%
ROIC(3y)13.28%
ROIC(5y)12.58%

1.3 Margins

Looking at the Profit Margin, with a value of 19.47%, DEO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
DEO's Profit Margin has declined in the last couple of years.
DEO has a Operating Margin of 29.53%. This is amongst the best in the industry. DEO outperforms 90.63% of its industry peers.
DEO's Operating Margin has been stable in the last couple of years.
DEO has a Gross Margin of 59.47%. 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 RankSector Rank
OM 29.53%
PM (TTM) 19.47%
GM 59.47%
OM growth 3Y0.29%
OM growth 5Y-0.45%
PM growth 3Y22.09%
PM growth 5Y-2.56%
GM growth 3Y-0.39%
GM growth 5Y-0.73%

3

2. Health

2.1 Basic Checks

DEO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for DEO has been reduced compared to 1 year ago.
Compared to 5 years ago, DEO has less shares outstanding
DEO has a worse debt/assets ratio than last year.

2.2 Solvency

DEO has an Altman-Z score of 2.45. This is not the best score and indicates that DEO is in the grey zone with still only limited risk for bankruptcy at the moment.
DEO's Altman-Z score of 2.45 is in line compared to the rest of the industry. DEO outperforms 53.13% of its industry peers.
The Debt to FCF ratio of DEO is 7.08, which is on the high side as it means it would take DEO, 7.08 years of fcf income to pay off all of its debts.
DEO has a Debt to FCF ratio (7.08) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.99 is on the high side and indicates that DEO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.99, DEO is not doing good in the industry: 78.13% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.99
Debt/FCF 7.08
Altman-Z 2.45
ROIC/WACC1.81
WACC7.32%

2.3 Liquidity

DEO has a Current Ratio of 1.58. This is a normal value and indicates that DEO is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.58, DEO perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
A Quick Ratio of 0.65 indicates that DEO may have some problems paying its short term obligations.
The Quick ratio of DEO (0.65) is worse than 65.63% of its industry peers.
Industry RankSector Rank
Current Ratio 1.58
Quick Ratio 0.65

3

3. Growth

3.1 Past

DEO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.67%.
The Earnings Per Share has been growing by 10.58% on average over the past years. This is quite good.
The Revenue has grown by 12.02% in the past year. This is quite good.
Measured over the past years, DEO shows a quite strong growth in Revenue. The Revenue has been growing by 12.59% on average per year.
EPS 1Y (TTM)-6.67%
EPS 3Y21.44%
EPS 5Y10.58%
EPS growth Q2Q-6.61%
Revenue 1Y (TTM)12.02%
Revenue growth 3Y23.25%
Revenue growth 5Y12.59%
Revenue growth Q2Q-1.42%

3.2 Future

The Earnings Per Share is expected to grow by 2.84% on average over the next years.
DEO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.36% yearly.
EPS Next Y-0.61%
EPS Next 2Y2.22%
EPS Next 3Y3.69%
EPS Next 5Y2.84%
Revenue Next Year-6%
Revenue Next 2Y-1.44%
Revenue Next 3Y0.73%
Revenue Next 5Y-1.36%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 14.93, the valuation of DEO can be described as correct.
Based on the Price/Earnings ratio, DEO is valued cheaply inside the industry as 90.63% of the companies are valued more expensively.
DEO is valuated rather cheaply when we compare the Price/Earnings ratio to 24.76, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.73, DEO is valued correctly.
Based on the Price/Forward Earnings ratio, DEO is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
DEO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.26.
Industry RankSector Rank
PE 14.93
Fwd PE 13.73

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, DEO is valued a bit cheaper than 75.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 71.88% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 20.75
EV/EBITDA 10.74

4.3 Compensation for Growth

DEO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.41
EPS Next 2Y2.22%
EPS Next 3Y3.69%

5

5. Dividend

5.1 Amount

DEO has a Yearly Dividend Yield of 2.88%. Purely for dividend investing, there may be better candidates out there.
DEO's Dividend Yield is rather good when compared to the industry average which is at 2.50. DEO pays more dividend than 81.25% of the companies in the same industry.
DEO's Dividend Yield is comparable with the S&P500 average which is at 2.44.
Industry RankSector Rank
Dividend Yield 2.88%

5.2 History

The dividend of DEO is nicely growing with an annual growth rate of 9.56%!
DEO has been paying a dividend for at least 10 years, so it has a reliable track record.
DEO has decreased its dividend recently.
Dividend Growth(5Y)9.56%
Div Incr Years1
Div Non Decr Years1

5.3 Sustainability

59.56% of the earnings are spent on dividend by DEO. This is a bit on the high side, but may be sustainable.
DEO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP59.56%
EPS Next 2Y2.22%
EPS Next 3Y3.69%

DIAGEO PLC-SPONSORED ADR

NYSE:DEO (4/19/2024, 7:04:00 PM)

After market: 140.76 0 (0%)

140.76

-0.03 (-0.02%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap78.32B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.88%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 14.93
Fwd PE 13.73
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.41
Profitability
Industry RankSector Rank
ROA 8.68%
ROE 41.47%
ROCE
ROIC
ROICexc
ROICexgc
OM 29.53%
PM (TTM) 19.47%
GM 59.47%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.45
Health
Industry RankSector Rank
Debt/Equity 1.99
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.58
Quick Ratio 0.65
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-6.67%
EPS 3Y21.44%
EPS 5Y
EPS growth Q2Q
EPS Next Y-0.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)12.02%
Revenue growth 3Y23.25%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y