DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
NYSE:DEO - New York Stock Exchange, Inc. - US25243Q2057 - ADR - Currency: USD
Taking everything into account, DEO scores 5 out of 10 in our fundamental rating. DEO was compared to 33 industry peers in the Beverages industry. While DEO has a great profitability rating, there are quite some concerns on its financial health. DEO is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
DEO had positive earnings in the past year.
DEO had a positive operating cash flow in the past year.
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
DEO's Return On Assets of 7.66% is fine compared to the rest of the industry. DEO outperforms 63.64% of its industry peers.
DEO's Return On Equity of 34.96% is amongst the best of the industry. DEO outperforms 87.88% of its industry peers.
DEO has a better Return On Invested Capital (12.39%) than 69.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DEO is in line with the industry average of 11.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.66% | ||
| ROE | 34.96% | ||
| ROIC | 12.39% |
ROA(3y)9.1%
ROA(5y)7.97%
ROE(3y)41.78%
ROE(5y)36.94%
ROIC(3y)13.3%
ROIC(5y)12.38%
1.3 Margins
DEO's Profit Margin of 17.79% is amongst the best of the industry. DEO outperforms 87.88% of its industry peers.
DEO's Profit Margin has declined in the last couple of years.
DEO has a better Operating Margin (28.74%) than 96.97% of its industry peers.
In the last couple of years the Operating Margin of DEO has declined.
With an excellent Gross Margin value of 60.45%, DEO belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Gross Margin of DEO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.74% | ||
| PM (TTM) | 17.79% | ||
| GM | 60.45% |
OM growth 3Y-0.1%
OM growth 5Y-1.72%
PM growth 3Y-2.95%
PM growth 5Y-4.91%
GM growth 3Y-0.14%
GM growth 5Y-0.65%
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.
Compared to 1 year ago, DEO has less shares outstanding
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 2.36. 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.
With a Altman-Z score value of 2.36, DEO perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
DEO has a debt to FCF ratio of 8.05. This is a slightly negative value and a sign of low solvency as DEO would need 8.05 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.05, DEO is in line with its industry, outperforming 51.52% of the companies in the same industry.
A Debt/Equity ratio of 1.87 is on the high side and indicates that DEO has dependencies on debt financing.
The Debt to Equity ratio of DEO (1.87) is worse than 84.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | 8.05 | ||
| Altman-Z | 2.36 |
ROIC/WACC1.62
WACC7.67%
2.3 Liquidity
A Current Ratio of 1.60 indicates that DEO should not have too much problems paying its short term obligations.
The Current ratio of DEO (1.60) is comparable to the rest of the industry.
DEO has a Quick Ratio of 1.60. 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 0.67 is in line compared to the rest of the industry. DEO outperforms 45.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
The earnings per share for DEO have decreased strongly by -10.02% in the last year.
DEO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.58% yearly.
DEO shows a decrease in Revenue. In the last year, the revenue decreased by -0.93%.
Measured over the past years, DEO shows a quite strong growth in Revenue. The Revenue has been growing by 9.51% on average per year.
EPS 1Y (TTM)-10.02%
EPS 3Y9.77%
EPS 5Y6.58%
EPS Q2Q%-9.65%
Revenue 1Y (TTM)-0.93%
Revenue growth 3Y7.38%
Revenue growth 5Y9.51%
Sales Q2Q%-0.56%
3.2 Future
The Earnings Per Share is expected to grow by 4.61% on average over the next years.
The Revenue is expected to grow by 3.59% on average over the next years.
EPS Next Y-7.36%
EPS Next 2Y-0.97%
EPS Next 3Y1.85%
EPS Next 5Y4.61%
Revenue Next Year0.13%
Revenue Next 2Y1.5%
Revenue Next 3Y2.5%
Revenue Next 5Y3.59%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
DEO is valuated correctly with a Price/Earnings ratio of 15.11.
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.
Compared to an average S&P500 Price/Earnings ratio of 26.32, DEO is valued a bit cheaper.
The Price/Forward Earnings ratio is 14.51, which indicates a correct valuation of DEO.
Based on the Price/Forward Earnings ratio, DEO is valued a bit cheaper than 75.76% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, DEO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.11 | ||
| Fwd PE | 14.51 |
4.2 Price Multiples
DEO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DEO is cheaper than 60.61% of the companies in the same industry.
DEO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DEO is cheaper than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.07 | ||
| EV/EBITDA | 12.14 |
4.3 Compensation for Growth
The decent profitability rating of DEO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.3
EPS Next 2Y-0.97%
EPS Next 3Y1.85%
5. Dividend
5.1 Amount
DEO has a Yearly Dividend Yield of 3.99%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.27, DEO pays a better dividend. On top of this DEO pays more dividend than 87.88% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, DEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.99% |
5.2 History
The dividend of DEO is nicely growing with an annual growth rate of 8.40%!
DEO has paid a dividend for at least 10 years, which is a reliable track record.
DEO has decreased its dividend in the last 3 years.
Dividend Growth(5Y)8.4%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
63.78% 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.
DP63.78%
EPS Next 2Y-0.97%
EPS Next 3Y1.85%
NYSE:DEO (6/18/2025, 10:34:23 AM)
102.3
+0.03 (+0.03%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners59.21%
Inst Owner Change-17.66%
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap56.84B
Analysts75.15
Price Target134.54 (31.52%)
Short Float %0.1%
Short Ratio0.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.99% |
Yearly Dividend1.01
Dividend Growth(5Y)8.4%
DP63.78%
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)-4.16%
PT rev (3m)0.01%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-2.2%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.11 | ||
| Fwd PE | 14.51 | ||
| P/S | 2.81 | ||
| P/FCF | 21.07 | ||
| P/OCF | 13.35 | ||
| P/B | 5.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.14 |
EPS(TTM)6.77
EY6.62%
EPS(NY)7.05
Fwd EY6.89%
FCF(TTM)4.86
FCFY4.75%
OCF(TTM)7.66
OCFY7.49%
SpS36.37
BVpS18.51
TBVpS-8.06
PEG (NY)N/A
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.66% | ||
| ROE | 34.96% | ||
| ROCE | 15.92% | ||
| ROIC | 12.39% | ||
| ROICexc | 13.1% | ||
| ROICexgc | 22.91% | ||
| OM | 28.74% | ||
| PM (TTM) | 17.79% | ||
| GM | 60.45% | ||
| FCFM | 13.35% |
ROA(3y)9.1%
ROA(5y)7.97%
ROE(3y)41.78%
ROE(5y)36.94%
ROIC(3y)13.3%
ROIC(5y)12.38%
ROICexc(3y)14.04%
ROICexc(5y)13.35%
ROICexgc(3y)24.95%
ROICexgc(5y)24.37%
ROCE(3y)17.22%
ROCE(5y)16.02%
ROICexcg growth 3Y-1.37%
ROICexcg growth 5Y-3.39%
ROICexc growth 3Y1.39%
ROICexc growth 5Y0.11%
OM growth 3Y-0.1%
OM growth 5Y-1.72%
PM growth 3Y-2.95%
PM growth 5Y-4.91%
GM growth 3Y-0.14%
GM growth 5Y-0.65%
F-Score7
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | 8.05 | ||
| Debt/EBITDA | 3.06 | ||
| Cap/Depr | 331.21% | ||
| Cap/Sales | 7.72% | ||
| Interest Coverage | 5.43 | ||
| Cash Conversion | 67.82% | ||
| Profit Quality | 75.05% | ||
| Current Ratio | 1.6 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z | 2.36 |
F-Score7
WACC7.67%
ROIC/WACC1.62
Cap/Depr(3y)182.68%
Cap/Depr(5y)145.23%
Cap/Sales(3y)7.15%
Cap/Sales(5y)6.46%
Profit Quality(3y)67.85%
Profit Quality(5y)86.47%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.02%
EPS 3Y9.77%
EPS 5Y6.58%
EPS Q2Q%-9.65%
EPS Next Y-7.36%
EPS Next 2Y-0.97%
EPS Next 3Y1.85%
EPS Next 5Y4.61%
Revenue 1Y (TTM)-0.93%
Revenue growth 3Y7.38%
Revenue growth 5Y9.51%
Sales Q2Q%-0.56%
Revenue Next Year0.13%
Revenue Next 2Y1.5%
Revenue Next 3Y2.5%
Revenue Next 5Y3.59%
EBIT growth 1Y-3.52%
EBIT growth 3Y7.27%
EBIT growth 5Y7.63%
EBIT Next Year10.13%
EBIT Next 3Y6.69%
EBIT Next 5Y3.77%
FCF growth 1Y24.1%
FCF growth 3Y-12.98%
FCF growth 5Y-0.09%
OCF growth 1Y25.12%
OCF growth 3Y-4.63%
OCF growth 5Y4.64%