DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - NYSE:DEO - US25243Q2057 - ADR
95.38 USD
+4.58 (+5.04%)
DEO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 33 industry peers in the Beverages industry. While DEO is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
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
Looking at the Return On Assets, with a value of 4.77%, DEO is in line with its industry, outperforming 54.55% of the companies in the same 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.
With a Return On Invested Capital value of 8.31%, DEO perfoms like the industry average, outperforming 57.58% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DEO is in line with the industry average of 10.70%.
| 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
The Profit Margin of DEO (11.63%) is better than 75.76% of its industry peers.
DEO's Profit Margin has been stable in the last couple of years.
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.
In the last couple of years the Operating Margin of DEO has declined.
Looking at the Gross Margin, with a value of 60.13%, DEO belongs to the top of the industry, outperforming 87.88% 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 | 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DEO is still creating some value.
DEO has about the same amout of shares outstanding than it did 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 2.07 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
DEO has a Altman-Z score (2.07) which is in line with 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's Debt to Equity ratio of 1.88 is on the low side compared to the rest of the industry. DEO is outperformed by 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.07 |
ROIC/WACC1.13
WACC7.37%
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 better than 60.61% of its industry peers.
A Quick Ratio of 0.64 indicates that DEO may have some problems paying its short term obligations.
DEO has a worse Quick ratio (0.64) than 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The earnings per share for DEO have decreased by -8.65% in the last year.
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.
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 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
The Earnings Per Share is expected to grow by 7.61% on average over the next years.
The Revenue is expected to grow by 3.29% on average over the next years.
EPS Next Y6.78%
EPS Next 2Y5.4%
EPS Next 3Y6.2%
EPS Next 5Y7.61%
Revenue Next Year0.6%
Revenue Next 2Y2.18%
Revenue Next 3Y1.48%
Revenue Next 5Y3.29%
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
With a Price/Earnings ratio of 14.54, DEO is valued correctly.
72.73% of the companies in the same industry are more expensive than DEO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of DEO to the average of the S&P500 Index (26.06), we can say DEO is valued slightly cheaper.
The Price/Forward Earnings ratio is 13.61, which indicates a correct valuation of DEO.
DEO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DEO is cheaper than 69.70% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DEO to the average of the S&P500 Index (32.73), we can say DEO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.54 | ||
| Fwd PE | 13.61 |
4.2 Price Multiples
DEO's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, DEO is valued a bit cheaper than the industry average as 69.70% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.59 | ||
| EV/EBITDA | 11.72 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DEO does not grow enough to justify the current Price/Earnings ratio.
DEO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.14
PEG (5Y)1.72
EPS Next 2Y5.4%
EPS Next 3Y6.2%
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 3.14. DEO pays more dividend than 96.97% of the companies in the same industry.
DEO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.56% |
5.2 History
The dividend of DEO is nicely growing with an annual growth rate of 8.14%!
DEO has paid a dividend for at least 10 years, which is 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.
DEO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP97.62%
EPS Next 2Y5.4%
EPS Next 3Y6.2%
NYSE:DEO (11/10/2025, 11:54:45 AM)
95.38
+4.58 (+5.04%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners63.72%
Inst Owner Change0.41%
Ins Owners0.06%
Ins Owner ChangeN/A
Market Cap53.02B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.25
Price Target121.71 (27.61%)
Short Float %0.21%
Short Ratio0.89
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)-2.65%
PT rev (3m)-4.88%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.51%
EPS NY rev (3m)-0.59%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.22%
Revenue NY rev (3m)-1.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.54 | ||
| Fwd PE | 13.61 | ||
| P/S | 2.62 | ||
| P/FCF | 19.59 | ||
| P/OCF | 12.28 | ||
| P/B | 4.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.72 |
EPS(TTM)6.56
EY6.88%
EPS(NY)7.01
Fwd EY7.35%
FCF(TTM)4.87
FCFY5.1%
OCF(TTM)7.77
OCFY8.14%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)2.14
PEG (5Y)1.72
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 | 2.07 |
F-Score4
WACC7.37%
ROIC/WACC1.13
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 3Y6.2%
EPS Next 5Y7.61%
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 3Y1.48%
Revenue Next 5Y3.29%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year19.08%
EBIT Next 3Y7.49%
EBIT Next 5Y5.62%
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%.