Diageo PLC DGE

Morningstar Rating
GBX1,601.50 +3.50 (0.22%)
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Company Report

Diageo’s Turnaround Efforts Should Revive Growth, but the Road Is Long

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions are part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The key motivation for Diageo's acquisition strategy in previous years was to broaden the product portfolio, which is critical in the on-trade channel (bars, restaurants, pubs). Volume in the spirits industry is more cyclical than beer, and with transient trends. Its broad presence across categories with both global strategic and local niche brands mitigates the risk to volume from shifting consumer preferences.

Price vs Fair Value

DGE is trading at a LOCK|Z<!!sw premium.
Price
GBX1,598.00
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Diageo’s extensive portfolio and strong innovation pipeline should allow the firm to remain a market leader in strategic regions such as the United States.

Bears

Premium spirits are more cyclical than most other consumer staples categories, including beer, and volume can suffer slightly steeper declines in economic downturns.

News

Trading Information

Previous Close Price
GBX1,598.00
Day Range
GBX1,598.00–1,617.50
52-Week Range
GBX1,295.50–1,903.91
Bid/Ask
GBX1,590.00 / GBX1,722.00
Shares Outstanding
2.22B
Market Cap
GBX3.56T
Volume/Avg
3M / 4M

Key Statistics

Price/Earnings (Normalized)
18.05
Price/Sales
2.44
Dividend Yield (Trailing)
3.93%
Dividend Yield (Forward)
2.83%
Dividend Payment Schedule
Jun, Dec
Total Yield
3.93%

Company Profile

Formed in 1997 through the merger of Grand Metropolitan and Guinness, Diageo is the largest distiller globally by sales. Diageo acquired some of the Seagram assets in 2001, which gave it brands such as Captain Morgan rum and Crown Royal Canadian whisky. Since then, mergers and acquisitions have mostly been bolt-on in nature, plugging gaps in the company’s product and geographic portfolio.
Sector
Consumer Defensive
Industry
Beverages - Wineries & Distilleries
Stock Style Box
Large Value
Total Number of Employees
27,938

Competitors

Valuation

Metric
DGE
RCO
RI
Price/Earnings (Normalized)
18.0527.789.31
Price/Book Value
4.331.140.96
Price/Sales
2.442.361.58
Price/Cash Flow
11.0816.888.18
Price/Earnings
DGE
RCO
RI

Financial Strength

Metric
DGE
RCO
RI
Quick Ratio
0.490.280.75
Current Ratio
1.603.162.47
Interest Coverage
3.154.214.34
Quick Ratio
DGE
RCO
RI

Profitability

Metric
DGE
RCO
RI
Return on Assets (Normalized)
7.53%2.59%3.95%
Return on Equity (Normalized)
32.87%4.63%9.59%
Return on Invested Capital (Normalized)
11.69%4.21%6.06%
Return on Assets
DGE
RCO
RI

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LOCK|?QF?T$qLOCK|%#$47B
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