DIAGEO PLC-SPONSORED ADR (DEO)
US25243Q2057 - ADR
Overall DEO gets a fundamental rating of 4 out of 10. We evaluated DEO against 33 industry peers in the Beverages industry. While DEO belongs to the best of the industry regarding profitability, there are 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.
In the past year DEO had a positive cash flow from operations.
Each year in the past 5 years DEO has 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 8.51%, DEO is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
Looking at the Return On Equity, with a value of 38.58%, DEO belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.82%, DEO is in the better half of the industry, outperforming 66.67% 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 13.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.51% | ||
| ROE | 38.58% | ||
| ROIC | 12.82% |
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
Looking at the Profit Margin, with a value of 19.09%, 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 Profit Margin of DEO has declined.
With an excellent Operating Margin value of 29.33%, DEO belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
In the last couple of years the Operating Margin of DEO has declined.
DEO's Gross Margin of 60.18% is amongst the best of the industry. DEO outperforms 87.88% of its industry peers.
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 | 29.33% | ||
| PM (TTM) | 19.09% | ||
| GM | 60.18% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DEO is creating some value.
Compared to 1 year ago, DEO has less shares outstanding
DEO has less shares outstanding than it did 5 years ago.
DEO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.63 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
DEO has a Altman-Z score (2.63) which is in line with its industry peers.
DEO has a debt to FCF ratio of 8.38. This is a slightly negative value and a sign of low solvency as DEO would need 8.38 years to pay back of all of its debts.
DEO has a Debt to FCF ratio (8.38) which is in line with its industry peers.
A Debt/Equity ratio of 1.91 is on the high side and indicates that DEO has dependencies on debt financing.
DEO's Debt to Equity ratio of 1.91 is on the low side compared to the rest of the industry. DEO is outperformed by 81.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.91 | ||
| Debt/FCF | 8.38 | ||
| Altman-Z | 2.63 |
ROIC/WACC1.65
WACC7.78%
2.3 Liquidity
A Current Ratio of 1.53 indicates that DEO should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.53, DEO is in line with its industry, outperforming 54.55% of the companies in the same industry.
A Quick Ratio of 0.55 indicates that DEO may have some problems paying its short term obligations.
DEO has a Quick ratio of 0.55. This is in the lower half of the industry: DEO underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
DEO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.21%.
Measured over the past 5 years, DEO shows a small growth in Earnings Per Share. The EPS has been growing by 6.58% on average per year.
Looking at the last year, DEO shows a decrease in Revenue. The Revenue has decreased by -1.39% in the last year.
DEO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.51% yearly.
EPS 1Y (TTM)-8.21%
EPS 3Y9.77%
EPS 5Y6.58%
EPS Q2Q%-10.52%
Revenue 1Y (TTM)-1.39%
Revenue growth 3Y7.38%
Revenue growth 5Y9.51%
Sales Q2Q%1.89%
3.2 Future
DEO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.46% yearly.
Based on estimates for the next years, DEO will show a small growth in Revenue. The Revenue will grow by 3.86% on average per year.
EPS Next Y1.92%
EPS Next 2Y3.68%
EPS Next 3Y3.04%
EPS Next 5Y5.46%
Revenue Next Year-0.1%
Revenue Next 2Y2.07%
Revenue Next 3Y2.19%
Revenue Next 5Y3.86%
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
A Price/Earnings ratio of 17.58 indicates a rather expensive valuation of DEO.
75.76% of the companies in the same industry are more expensive than DEO, based on the Price/Earnings ratio.
DEO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.54, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.25 indicates a rather expensive 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 66.67% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.99. DEO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.58 | ||
| Fwd PE | 17.25 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DEO.
DEO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DEO is cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.41 | ||
| EV/EBITDA | 13.9 |
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.
The decent profitability rating of DEO may justify a higher PE ratio.
PEG (NY)9.14
PEG (5Y)2.67
EPS Next 2Y3.68%
EPS Next 3Y3.04%
5. Dividend
5.1 Amount
DEO has a Yearly Dividend Yield of 3.14%.
Compared to an average industry Dividend Yield of 3.05, DEO pays a better dividend. On top of this DEO pays more dividend than 81.82% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, DEO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
5.2 History
On average, the dividend of DEO grows each year by 8.40%, which is quite nice.
DEO has been paying a dividend for at least 10 years, so it has 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
DEO pays out 57.93% of its income as dividend. 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.
DP57.93%
EPS Next 2Y3.68%
EPS Next 3Y3.04%
DIAGEO PLC-SPONSORED ADR
NYSE:DEO (12/24/2024, 8:06:07 PM)
126.56
+0.87 (+0.69%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners71.89%
Inst Owner Change0.94%
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap70.31B
Analysts71.88
Price Target137.8 (8.88%)
Short Float %0.03%
Short Ratio0.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
Dividend Growth(5Y)8.4%
DP57.93%
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)-3.33%
PT rev (3m)-5.46%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-1.81%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.58 | ||
| Fwd PE | 17.25 | ||
| P/S | 3.47 | ||
| P/FCF | 27.41 | ||
| P/OCF | 17.25 | ||
| P/B | 7.01 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.9 |
EPS(TTM)7.2
EY5.69%
EPS(NY)7.34
Fwd EY5.8%
FCF(TTM)4.62
FCFY3.65%
OCF(TTM)7.34
OCFY5.8%
SpS36.49
BVpS18.06
TBVpS-8.61
PEG (NY)9.14
PEG (5Y)2.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.51% | ||
| ROE | 38.58% | ||
| ROCE | 16.7% | ||
| ROIC | 12.82% | ||
| ROICexc | 13.37% | ||
| ROICexgc | 23.36% | ||
| OM | 29.33% | ||
| PM (TTM) | 19.09% | ||
| GM | 60.18% | ||
| FCFM | 12.65% |
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)14.05%
ROICexc(5y)13.36%
ROICexgc(3y)24.98%
ROICexgc(5y)24.39%
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-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.91 | ||
| Debt/FCF | 8.38 | ||
| Debt/EBITDA | 2.97 | ||
| Cap/Depr | 306.29% | ||
| Cap/Sales | 7.45% | ||
| Interest Coverage | 5.85 | ||
| Cash Conversion | 63.3% | ||
| Profit Quality | 66.28% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 2.63 |
F-Score6
WACC7.78%
ROIC/WACC1.65
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)-8.21%
EPS 3Y9.77%
EPS 5Y6.58%
EPS Q2Q%-10.52%
EPS Next Y1.92%
EPS Next 2Y3.68%
EPS Next 3Y3.04%
EPS Next 5Y5.46%
Revenue 1Y (TTM)-1.39%
Revenue growth 3Y7.38%
Revenue growth 5Y9.51%
Sales Q2Q%1.89%
Revenue Next Year-0.1%
Revenue Next 2Y2.07%
Revenue Next 3Y2.19%
Revenue Next 5Y3.86%
EBIT growth 1Y-5.83%
EBIT growth 3Y7.27%
EBIT growth 5Y7.63%
EBIT Next Year10.42%
EBIT Next 3Y5.23%
EBIT Next 5Y5.53%
FCF growth 1Y15.59%
FCF growth 3Y-12.98%
FCF growth 5Y-0.09%
OCF growth 1Y12.07%
OCF growth 3Y-4.63%
OCF growth 5Y4.64%