DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DEO - US25243Q2057 - ADR
88.43 USD
+1.48 (+1.7%)
88.4172 USD
-0.01 (-0.01%)
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 is not valued too expensively and it also shows a decent 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.
Each year in the past 5 years DEO had a positive operating cash flow.
1.2 Ratios
DEO has a Return On Assets of 4.77%. This is comparable to the rest of the industry: DEO outperforms 51.52% of its industry peers.
DEO has a Return On Equity of 21.23%. This is in the better half of the industry: DEO outperforms 72.73% of its industry peers.
The Return On Invested Capital of DEO (8.31%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years 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 Profit Margin of 11.63%. This is in the better half of the industry: DEO outperforms 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.
DEO has a better Gross Margin (60.13%) than 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 | 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.
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.
Compared to 1 year ago, DEO has a worse debt to assets ratio.
2.2 Solvency
DEO has an Altman-Z score of 2.04. 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 (2.04) which is comparable to the rest of the 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.
DEO's Debt to FCF ratio of 8.78 is in line compared to the rest of the industry. DEO outperforms 42.42% 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.
With a Debt to Equity ratio value of 1.88, DEO is not doing good in the industry: 87.88% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.04 |
ROIC/WACC1.13
WACC7.33%
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 in the better half 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.
With a Quick ratio value of 0.64, DEO is not doing good in the industry: 63.64% 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%.
The Earnings Per Share has been growing slightly by 3.59% on average over the past years.
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
DEO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.84% yearly.
Based on estimates for the next years, DEO will show a small growth in Revenue. The Revenue will grow by 2.42% on average per year.
EPS Next Y2.98%
EPS Next 2Y4.21%
EPS Next 3Y5%
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 13.48.
Based on the Price/Earnings ratio, DEO is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of DEO to the average of the S&P500 Index (27.19), we can say DEO is valued rather cheaply.
DEO is valuated correctly with a Price/Forward Earnings ratio of 13.09.
75.76% of the companies in the same industry are more expensive than DEO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.92. DEO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.48 | ||
| Fwd PE | 13.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DEO is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, DEO is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.16 | ||
| EV/EBITDA | 11.5 |
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)4.53
PEG (5Y)3.76
EPS Next 2Y4.21%
EPS Next 3Y5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.96%, DEO is a good candidate for dividend investing.
DEO's Dividend Yield is rather good when compared to the industry average which is at 1.77. 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 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.96% |
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
DEO pays out 97.62% of its income as dividend. 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.
DP97.62%
EPS Next 2Y4.21%
EPS Next 3Y5%
88.43
+1.48 (+1.7%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners64.39%
Inst Owner Change-0.18%
Ins Owners0.06%
Ins Owner ChangeN/A
Market Cap49.15B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.13
Price Target116.93 (32.23%)
Short Float %0.36%
Short Ratio1.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.96% |
Yearly Dividend1.03
Dividend Growth(5Y)8.14%
DP97.62%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
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)-1.39%
PT rev (3m)-7.04%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.29%
EPS NY rev (3m)-4.06%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.19%
Revenue NY rev (3m)-3.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.48 | ||
| Fwd PE | 13.09 | ||
| P/S | 2.43 | ||
| P/FCF | 18.16 | ||
| P/OCF | 11.38 | ||
| P/B | 4.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.5 |
EPS(TTM)6.56
EY7.42%
EPS(NY)6.76
Fwd EY7.64%
FCF(TTM)4.87
FCFY5.51%
OCF(TTM)7.77
OCFY8.78%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)4.53
PEG (5Y)3.76
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 | 2.04 |
F-Score4
WACC7.33%
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 5Y3.59%
EPS Q2Q%-7.14%
EPS Next Y2.98%
EPS Next 2Y4.21%
EPS Next 3Y5%
EPS Next 5Y6.84%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
Revenue Next Year-3.03%
Revenue Next 2Y0.1%
Revenue Next 3Y1.32%
Revenue Next 5Y2.42%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year12.59%
EBIT Next 3Y7.32%
EBIT Next 5Y4.43%
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.
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%.