DIAGEO PLC-SPONSORED ADR (DEO) Stock Fundamental Analysis
USA - NYSE:DEO - US25243Q2057 - ADR
93.9 USD
+0.84 (+0.9%)
93.9 USD
0 (0%)
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.
Each year in the past 5 years DEO has been profitable.
Each year in the past 5 years DEO had a positive operating cash flow.
1.2 Ratios
DEO has a Return On Assets (4.77%) which is in line with its industry peers.
DEO has a better Return On Equity (21.23%) than 75.76% of its industry peers.
DEO has a Return On Invested Capital (8.31%) which 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 10.75%.
| 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
Looking at the Profit Margin, with a value of 11.63%, 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 Profit Margin of DEO has remained more or less at the same level.
With a decent Operating Margin value of 21.41%, DEO is doing good in 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.
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.
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 2.08 indicates that DEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
DEO has a Altman-Z score of 2.08. This is comparable to the rest of the industry: DEO outperforms 51.52% of its industry peers.
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.
With a Debt to FCF ratio value of 8.78, DEO perfoms like the industry average, outperforming 42.42% of the companies in the same industry.
A Debt/Equity ratio of 1.88 is on the high side and indicates that DEO has dependencies on debt financing.
The Debt to Equity ratio of DEO (1.88) is worse than 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.88 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 2.08 |
ROIC/WACC1.12
WACC7.41%
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's Current ratio of 1.63 is fine compared to the rest of the industry. DEO outperforms 60.61% of its industry peers.
DEO has a Quick Ratio of 1.63. This is a bad value and indicates that DEO is not financially healthy enough and could expect problems in meeting its short term obligations.
DEO has a Quick ratio of 0.64. This is in the lower half of the industry: DEO underperforms 72.73% 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%.
DEO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.47% yearly.
The Revenue has decreased by -0.12% in the past year.
The Revenue has been growing by 11.49% on average over the past years. This is quite good.
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 7.93% on average over the next years.
Based on estimates for the next years, DEO will show a small growth in Revenue. The Revenue will grow by 3.47% on average per year.
EPS Next Y7.28%
EPS Next 2Y6.4%
EPS Next 3Y6.52%
EPS Next 5Y7.93%
Revenue Next Year0.82%
Revenue Next 2Y2.25%
Revenue Next 3Y1.66%
Revenue Next 5Y3.47%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
A Price/Earnings ratio of 14.31 indicates a correct valuation of DEO.
Based on the Price/Earnings ratio, DEO is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.13, DEO is valued a bit cheaper.
DEO is valuated correctly with a Price/Forward Earnings ratio of 13.34.
72.73% of the companies in the same industry are more expensive than DEO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of DEO to the average of the S&P500 Index (22.35), we can say DEO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.31 | ||
| Fwd PE | 13.34 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DEO.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DEO indicates a somewhat cheap valuation: DEO is cheaper than 69.70% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.29 | ||
| EV/EBITDA | 11.93 |
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)1.97
PEG (5Y)1.69
EPS Next 2Y6.4%
EPS Next 3Y6.52%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.54%, DEO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.10, 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 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.54% |
5.2 History
The dividend of DEO is nicely growing with an annual growth rate of 8.14%!
DEO has been paying a dividend for at least 10 years, so it has 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.
The dividend of DEO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP97.62%
EPS Next 2Y6.4%
EPS Next 3Y6.52%
93.9
+0.84 (+0.9%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners63.72%
Inst Owner Change-2.67%
Ins Owners0.06%
Ins Owner ChangeN/A
Market Cap52.19B
Revenue(TTM)20.25B
Net Income(TTM)2.35B
Analysts76.25
Price Target122.45 (30.4%)
Short Float %0.21%
Short Ratio0.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.54% |
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)-5.83%
PT rev (3m)-5.62%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-0.12%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.31 | ||
| Fwd PE | 13.34 | ||
| P/S | 2.58 | ||
| P/FCF | 19.29 | ||
| P/OCF | 12.09 | ||
| P/B | 4.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.93 |
EPS(TTM)6.56
EY6.99%
EPS(NY)7.04
Fwd EY7.5%
FCF(TTM)4.87
FCFY5.18%
OCF(TTM)7.77
OCFY8.27%
SpS36.42
BVpS19.95
TBVpS-6.63
PEG (NY)1.97
PEG (5Y)1.69
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 | 2.08 |
F-Score4
WACC7.41%
ROIC/WACC1.12
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 Y7.28%
EPS Next 2Y6.4%
EPS Next 3Y6.52%
EPS Next 5Y7.93%
Revenue 1Y (TTM)-0.12%
Revenue growth 3Y-1.08%
Revenue growth 5Y11.49%
Sales Q2Q%-3.34%
Revenue Next Year0.82%
Revenue Next 2Y2.25%
Revenue Next 3Y1.66%
Revenue Next 5Y3.47%
EBIT growth 1Y-27.08%
EBIT growth 3Y-12.6%
EBIT growth 5Y3.92%
EBIT Next Year19.08%
EBIT Next 3Y7.75%
EBIT Next 5Y6.12%
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%.