DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DEO - US25243Q2057 - ADR
86.87 USD
-2.29 (-2.57%)
86.76 USD
-0.11 (-0.13%)
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. 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
In the past year DEO was profitable.
In the past year DEO had a positive cash flow from operations.
DEO had positive earnings in each of the past 5 years.
DEO had a positive operating cash flow in each of the past 5 years.
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 72.73% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.31%, DEO is in line with its industry, outperforming 57.58% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DEO is in line with the industry average of 11.47%.
| 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
DEO has a better Profit Margin (11.63%) than 72.73% 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 75.76% 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 87.88% 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.
The number of shares outstanding for DEO remains at a similar level compared to 1 year ago.
The number of shares outstanding for DEO has been reduced compared to 5 years ago.
The debt/assets ratio for DEO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.05 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.05, DEO perfoms like the industry average, outperforming 48.48% of the companies in the same 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.
Looking at the Debt to FCF ratio, with a value of 8.78, DEO is in line with its industry, outperforming 42.42% of the companies in the same 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 | 2.05 |
ROIC/WACC1.14
WACC7.31%
2.3 Liquidity
A Current Ratio of 1.63 indicates that DEO should not have too much problems paying its short term obligations.
DEO's Current ratio of 1.63 is fine compared to the rest of the industry. DEO outperforms 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's Quick ratio of 0.64 is on the low side compared to the rest of the industry. DEO is outperformed by 63.64% 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.
DEO shows a decrease in Revenue. In the last year, the revenue decreased by -0.12%.
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
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 Y3.27%
EPS Next 2Y4.54%
EPS Next 3Y5.27%
EPS Next 5Y7.07%
Revenue Next Year-2.85%
Revenue Next 2Y0.27%
Revenue Next 3Y1.49%
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.
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 13.24.
Compared to the rest of the industry, the Price/Earnings ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 75.76% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.61. DEO is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 12.82, DEO is valued correctly.
Based on the Price/Forward 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/Forward Earnings ratio of 24.01, DEO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.24 | ||
| Fwd PE | 12.82 |
4.2 Price Multiples
DEO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DEO is cheaper than 63.64% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DEO is valued a bit cheaper than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.84 | ||
| EV/EBITDA | 11.57 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of DEO may justify a higher PE ratio.
PEG (NY)4.05
PEG (5Y)1.56
EPS Next 2Y4.54%
EPS Next 3Y5.27%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.73%, DEO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.77, DEO pays a better dividend. On top of this DEO pays more dividend than 96.97% of the companies listed in the same industry.
DEO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.73% |
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.
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
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 2Y4.54%
EPS Next 3Y5.27%
86.87
-2.29 (-2.57%)
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 Cap48.29B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.25
Price Target118.59 (36.51%)
Short Float %0.48%
Short Ratio1.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.73% |
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)-2.57%
PT rev (3m)-8.81%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-3.29%
EPS NY rev (3m)-3.69%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-3.43%
Revenue NY rev (3m)-3.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.24 | ||
| Fwd PE | 12.82 | ||
| P/S | 2.39 | ||
| P/FCF | 17.84 | ||
| P/OCF | 11.18 | ||
| P/B | 4.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.57 |
EPS(TTM)6.56
EY7.55%
EPS(NY)6.78
Fwd EY7.8%
FCF(TTM)4.87
FCFY5.6%
OCF(TTM)7.77
OCFY8.94%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)4.05
PEG (5Y)1.56
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 | 2.05 |
F-Score4
WACC7.31%
ROIC/WACC1.14
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 Y3.27%
EPS Next 2Y4.54%
EPS Next 3Y5.27%
EPS Next 5Y7.07%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
Revenue Next Year-2.85%
Revenue Next 2Y0.27%
Revenue Next 3Y1.49%
Revenue Next 5Y2.91%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year12.91%
EBIT Next 3Y7.54%
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%.