DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DEO - US25243Q2057 - ADR
89.35 USD
-2.71 (-2.94%)
We assign a fundamental rating of 5 out of 10 to DEO. DEO was compared to 33 industry peers in the Beverages industry. DEO has a medium profitability rating, but doesn't score so well on its financial health evaluation. DEO is not valued too expensively and it also shows a decent 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.
Each year in the past 5 years DEO has been profitable.
Each year in the past 5 years DEO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of DEO (4.77%) is comparable to the rest of the industry.
DEO's Return On Equity of 21.23% is fine compared to the rest of the industry. DEO outperforms 75.76% of its industry peers.
DEO has a Return On Invested Capital (8.31%) which is in line with its industry peers.
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 11.60%.
| 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
With a decent Profit Margin value of 11.63%, DEO is doing good in the industry, outperforming 75.76% of the companies in the same industry.
In the last couple of years the Profit Margin of DEO has remained more or less at the same level.
Looking at the Operating Margin, with a value of 21.41%, DEO is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
DEO's Operating Margin has declined in the last couple of years.
DEO's Gross Margin of 60.13% is amongst the best of the industry. DEO outperforms 87.88% 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
DEO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DEO has about the same amout of shares outstanding than it did 1 year ago.
DEO has less shares outstanding than it did 5 years ago.
The debt/assets ratio for DEO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.08 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
DEO has a Altman-Z score (2.08) which is comparable to the rest of the industry.
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 in line with its industry peers.
A Debt/Equity ratio of 1.88 is on the high side and indicates that DEO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.88, DEO is not doing good in the industry: 87.88% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.08 |
ROIC/WACC1.12
WACC7.39%
2.3 Liquidity
A Current Ratio of 1.63 indicates that DEO should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.63, DEO is doing good in the industry, outperforming 60.61% of the companies in the same industry.
DEO has a Quick Ratio of 1.63. This is a bad value and indicates that DEO is not financially healthy enough and could expect problems in meeting its short term obligations.
DEO's Quick ratio of 0.64 is on the low side compared to the rest of the industry. DEO is outperformed by 66.67% 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%.
The Earnings Per Share has been growing by 8.47% on average over the past years. This is quite good.
The Revenue has decreased by -0.12% in the past year.
The Revenue has been growing by 11.49% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.65%
EPS 3Y-6.76%
EPS 5Y8.47%
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
Based on estimates for the next years, DEO will show a small growth in Earnings Per Share. The EPS will grow by 7.07% on average per year.
Based on estimates for the next years, DEO will show a small growth in Revenue. The Revenue will grow by 2.91% on average per year.
EPS Next Y6.78%
EPS Next 2Y5.4%
EPS Next 3Y5.2%
EPS Next 5Y7.07%
Revenue Next Year0.6%
Revenue Next 2Y2.18%
Revenue Next 3Y0.92%
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 stable.
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
The Price/Earnings ratio is 13.62, which indicates a correct valuation of DEO.
Based on the Price/Earnings ratio, DEO is valued a bit cheaper than the industry average as 75.76% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of DEO to the average of the S&P500 Index (26.37), we can say DEO is valued slightly cheaper.
A Price/Forward Earnings ratio of 12.75 indicates a correct valuation of DEO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 72.73% of the companies listed in the same industry.
DEO is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.20, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.62 | ||
| Fwd PE | 12.75 |
4.2 Price Multiples
63.64% of the companies in the same industry are more expensive than DEO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 69.70% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.35 | ||
| EV/EBITDA | 11.84 |
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)2.01
PEG (5Y)1.61
EPS Next 2Y5.4%
EPS Next 3Y5.2%
5. Dividend
5.1 Amount
DEO has a Yearly Dividend Yield of 4.56%, which is a nice return.
DEO's Dividend Yield is rather good when compared to the industry average which is at 3.06. DEO pays more dividend than 96.97% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, DEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
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
97.62% of the earnings are spent on dividend by DEO. 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 2Y5.4%
EPS Next 3Y5.2%
NYSE:DEO (12/4/2025, 2:02:07 PM)
89.35
-2.71 (-2.94%)
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 Cap49.67B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.25
Price Target117.7 (31.73%)
Short Float %0.51%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
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)-6.43%
PT rev (3m)-8%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.47%
EPS NY rev (3m)-0.42%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.22%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.62 | ||
| Fwd PE | 12.75 | ||
| P/S | 2.45 | ||
| P/FCF | 18.35 | ||
| P/OCF | 11.5 | ||
| P/B | 4.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.84 |
EPS(TTM)6.56
EY7.34%
EPS(NY)7.01
Fwd EY7.84%
FCF(TTM)4.87
FCFY5.45%
OCF(TTM)7.77
OCFY8.69%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)2.01
PEG (5Y)1.61
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 | 2.08 |
F-Score4
WACC7.39%
ROIC/WACC1.12
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 5Y8.47%
EPS Q2Q%-7.14%
EPS Next Y6.78%
EPS Next 2Y5.4%
EPS Next 3Y5.2%
EPS Next 5Y7.07%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
Revenue Next Year0.6%
Revenue Next 2Y2.18%
Revenue Next 3Y0.92%
Revenue Next 5Y2.91%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year19.08%
EBIT Next 3Y6.67%
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 5 / 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%.