Stock Analysis Report

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Last Updated

2021/06/21 22:03 UTC

Data Sources

Company Financials +

Share Price & News

How has Diageo's share price performed over time and what events caused price changes?

Latest Share Price and Events

Stable Share Price: DGE is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: DGE's weekly volatility (2%) has been stable over the past year.

Market Performance

7 Day Return




GB Beverage


GB Market

1 Year Return




GB Beverage


GB Market

Return vs Industry: DGE matched the UK Beverage industry which returned 19.3% over the past year.

Return vs Market: DGE exceeded the UK Market which returned 16% over the past year.

Shareholder returns

7 Day1.5%0.4%-1.7%
30 Day3.2%1.8%-0.04%
90 Day16.0%14.8%5.4%
1 Year27.9%24.6%22.5%19.3%21.6%16.0%
3 Year39.6%30.0%29.1%19.8%11.6%-1.3%
5 Year106.1%82.2%109.1%84.3%51.8%23.3%

Long-Term Price Volatility Vs. Market

How volatile is Diageo's share price compared to the market and industry in the last 5 years?

Simply Wall St News


Is Diageo undervalued compared to its fair value and its price relative to the market?


Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: DGE (£34.6) is trading below our estimate of fair value (£37.87)

Significantly Below Fair Value: DGE is trading below fair value, but not by a significant amount.

Price To Earnings Ratio

PE vs Industry: DGE is poor value based on its PE Ratio (71.9x) compared to the UK Beverage industry average (29.3x).

PE vs Market: DGE is poor value based on its PE Ratio (71.9x) compared to the UK market (24.5x).

Price to Earnings Growth Ratio

PEG Ratio: DGE is poor value based on its PEG Ratio (6.4x)

Price to Book Ratio

PB vs Industry: DGE is overvalued based on its PB Ratio (11.9x) compared to the GB Beverage industry average (4.1x).

Future Growth

How is Diageo forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DGE's forecast earnings growth (11.3% per year) is above the savings rate (0.9%).

Earnings vs Market: DGE's earnings (11.3% per year) are forecast to grow slower than the UK market (17.7% per year).

High Growth Earnings: DGE's earnings are forecast to grow, but not significantly.

Revenue vs Market: DGE's revenue (5.5% per year) is forecast to grow faster than the UK market (5.3% per year).

High Growth Revenue: DGE's revenue (5.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DGE's Return on Equity is forecast to be very high in 3 years time (45.2%).

Past Performance

How has Diageo performed over the past 5 years?


Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DGE has a large one-off loss of £1.3B impacting its December 31 2020 financial results.

Growing Profit Margin: DGE's current net profit margins (9.8%) are lower than last year (23.1%).

Past Earnings Growth Analysis

Earnings Trend: DGE's earnings have declined by 4.6% per year over the past 5 years.

Accelerating Growth: DGE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DGE had negative earnings growth (-63%) over the past year, making it difficult to compare to the Beverage industry average (-21.7%).

Return on Equity

High ROE: DGE's Return on Equity (14.1%) is considered low.

Financial Health

How is Diageo's financial position?

Financial Position Analysis

Short Term Liabilities: DGE's short term assets (£11.8B) exceed its short term liabilities (£6.7B).

Long Term Liabilities: DGE's short term assets (£11.8B) do not cover its long term liabilities (£17.7B).

Debt to Equity History and Analysis

Debt Level: DGE's debt to equity ratio (182.3%) is considered high.

Reducing Debt: DGE's debt to equity ratio has increased from 99.4% to 182.3% over the past 5 years.

Debt Coverage: DGE's debt is not well covered by operating cash flow (19.8%).

Interest Coverage: DGE's interest payments on its debt are well covered by EBIT (8.7x coverage).

Balance Sheet


What is Diageo current dividend yield, its reliability and sustainability?


Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DGE's dividend (2.02%) is higher than the bottom 25% of dividend payers in the UK market (1.29%).

High Dividend: DGE's dividend (2.02%) is low compared to the top 25% of dividend payers in the UK market (4.07%).

Stability and Growth of Payments

Stable Dividend: DGE's dividends per share have been stable in the past 10 years.

Growing Dividend: DGE's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (146.4%), DGE's dividend payments are not well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: DGE's dividends in 3 years are forecast to be covered by earnings (53.3% payout ratio).

Next Steps


How experienced are the management team and are they aligned to shareholders interests?


Average management tenure


Ivan Menezes (61 yo)





Mr. Ivan M. Menezes has been the Chief Executive Officer at Diageo PLC since July 1, 2013. Mr. Menezes served as the Chief Operating Officer of Diageo PLC from March 1, 2012 to July 1, 2013. He served as C...

CEO Compensation Analysis

Compensation vs Market: Ivan's total compensation ($USD2.95M) is about average for companies of similar size in the UK market ($USD3.55M).

Compensation vs Earnings: Ivan's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: DGE's management team is seasoned and experienced (5.7 years average tenure).

Board Members

Experienced Board: DGE's board of directors are considered experienced (3 years average tenure).


Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: DGE insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Company Information

Diageo plc's company bio, employee growth, exchange listings and data sources

Key Information

  • Name: Diageo plc
  • Ticker: DGE
  • Exchange: LSE
  • Founded: 1886
  • Industry: Distillers and Vintners
  • Sector: Food, Beverage & Tobacco
  • Market Cap: UK£81.436b
  • Shares outstanding: 2.34b
  • Website:

Number of Employees


  • Diageo plc
  • Lakeside Drive
  • Park Royal
  • London
  • Greater London
  • NW10 7HQ
  • United Kingdom



Diageo plc, together with its subsidiaries, produces, markets, and sells alcoholic beverages. The company offers scotch, whisky, gin, vodka, rum, ready to drink products, Irish cream liqueur, raki, liqueur...

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/21 22:03
End of Day Share Price2021/06/21 00:00
Annual Earnings2020/06/30

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.