DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:DEO • US25243Q2057
92.8 USD
+1.76 (+1.93%)
At close: Jan 30, 2026
92.63 USD
-0.17 (-0.18%)
After Hours: 1/30/2026, 8:04:00 PM
Overall DEO gets a fundamental rating of 5 out of 10. We evaluated DEO against 33 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.
- DEO had a positive operating cash flow in the past year.
- In the past 5 years DEO has always been profitable.
- DEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a Return On Assets value of 4.77%, DEO perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
- With a decent Return On Equity value of 21.23%, DEO is doing good in the industry, outperforming 71.88% of the companies in the same industry.
- DEO has a Return On Invested Capital (8.31%) which is comparable to the rest of the industry.
- Measured over the past 3 years, the Average Return On Invested Capital for DEO is in line with the industry average of 11.45%.
| 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 71.88% of its industry peers.
- DEO's Profit Margin has been stable in the last couple of years.
- DEO has a better Operating Margin (21.41%) than 75.00% of its industry peers.
- DEO's Operating Margin has declined in the last couple of years.
- The Gross Margin of DEO (60.13%) is better than 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DEO is still creating some value.
- Compared to 1 year ago, DEO has about the same amount of shares outstanding.
- Compared to 5 years ago, DEO has less shares outstanding
- The debt/assets ratio for DEO is higher compared to a year ago.
2.2 Solvency
- DEO has an Altman-Z score of 2.08. 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 has a Altman-Z score (2.08) which is comparable to the rest of the industry.
- DEO has a debt to FCF ratio of 8.78. This is a slightly negative value and a sign of low solvency as DEO would need 8.78 years to pay back of all of its debts.
- DEO has a Debt to FCF ratio of 8.78. This is comparable to the rest of the industry: DEO outperforms 43.75% of its industry peers.
- A Debt/Equity ratio of 1.88 is on the high side and indicates that DEO has dependencies on debt 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 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.08 |
ROIC/WACC1.12
WACC7.4%
2.3 Liquidity
- DEO has a Current Ratio of 1.63. This is a normal value and indicates that DEO is financially healthy and should not expect problems in meeting its short term obligations.
- DEO has a Current ratio of 1.63. This is comparable to the rest of the industry: DEO outperforms 59.38% of its industry peers.
- A Quick Ratio of 0.64 indicates that DEO may have some problems paying its short term obligations.
- With a Quick ratio value of 0.64, DEO is not doing good in the industry: 68.75% of the companies in the same industry are doing better.
| 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%.
- Measured over the past 5 years, DEO shows a small growth in Earnings Per Share. The EPS has been growing by 3.59% on average per year.
- Looking at the last year, DEO shows a decrease in Revenue. The Revenue has decreased by -0.12% in the last 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 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
- Based on estimates for the next years, DEO will show a small growth in Earnings Per Share. The EPS will grow by 6.84% on average per year.
- DEO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.42% yearly.
EPS Next Y2.09%
EPS Next 2Y3.39%
EPS Next 3Y4.58%
EPS Next 5Y6.84%
Revenue Next Year-3.03%
Revenue Next 2Y0.1%
Revenue Next 3Y1.32%
Revenue Next 5Y2.42%
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
- DEO is valuated correctly with a Price/Earnings ratio of 14.15.
- Based on the Price/Earnings ratio, DEO is valued a bit cheaper than the industry average as 78.13% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of DEO to the average of the S&P500 Index (28.32), we can say DEO is valued rather cheaply.
- A Price/Forward Earnings ratio of 13.85 indicates a correct valuation of DEO.
- DEO's Price/Forward Earnings ratio is rather cheap when compared to the industry. DEO is cheaper than 81.25% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.57. DEO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.15 | ||
| Fwd PE | 13.85 |
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.
- Based on the Price/Free Cash Flow ratio, DEO is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.06 | ||
| EV/EBITDA | 11.91 |
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)6.76
PEG (5Y)3.94
EPS Next 2Y3.39%
EPS Next 3Y4.58%
5. Dividend
5.1 Amount
- DEO has a Yearly Dividend Yield of 4.85%, which is a nice return.
- DEO's Dividend Yield is rather good when compared to the industry average which is at 1.74. DEO pays more dividend than 96.88% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, DEO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.85% |
5.2 History
- On average, the dividend of DEO grows each year by 8.14%, which is quite nice.
- 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)8.14%
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.
- DEO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP97.62%
EPS Next 2Y3.39%
EPS Next 3Y4.58%
DIAGEO PLC-SPONSORED ADR / DEO FAQ
What is the fundamental rating for DEO stock?
ChartMill assigns a fundamental rating of 5 / 10 to DEO.
Can you provide the valuation status for DIAGEO PLC-SPONSORED ADR?
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.
How financially healthy is DIAGEO PLC-SPONSORED ADR?
The financial health rating of DIAGEO PLC-SPONSORED ADR (DEO) is 3 / 10.
Is the dividend of DIAGEO PLC-SPONSORED ADR sustainable?
The dividend rating of DIAGEO PLC-SPONSORED ADR (DEO) is 6 / 10 and the dividend payout ratio is 97.62%.