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Diageo plc (NYSE: DEO) – Is this large market cap stock undervalued?

Diageo plc (NYSE: DEO), is firmly in the large market cap category with market cap of 70600.91. To be considered a large market cap stock companies have to be valued at more than $10 billion. The current price for Diageo plc is 114.2 (with a change from open of 0.27%), this in conjunction with a target price of 123.15. Volume today has so far reached 185439, with an average volume of about 829.67. The GAP for this stock, is 1.06%.

The P/E ratio is 23.88, bringing the forward P/E to a value of 18.45. The current EPS for Diageo plc, is 4.72, with a EPS growth for this year coming to a value of -5.80%. Performance has been interesting with performance year to date coming to 6.41%.

Looking further into the growth statistics for Diageo plc, EPS is looking like it will grow 11.09% in the next year. Looking even further it is projected to be 6.80%. Quarter over quarter is 31.40% for EPS growth and for sales growth quarter over quarter it is 12.80%. Looking at past EPS growth statistics we see that for the past five years it has been 3.20%. Sales growth for the past five years has in fact been 1.10%.

Looking at the ownership, we see that the insider ownership is at 0.70% and institutional ownership is 12.30%. Shares outstanding is 626.45, while shares float is at a value of 625.78. Float short for Diageo plc is 0.39% and the short ratio is 2.93.

In terms of debt, long term debt/equity is 1, while the total debt/equity comes to 1.28. The ability to meet these debts, means that the current ratio is 1.4, and the quick ratio is 0.7. The most recent gross margin is 59.50% and their operating margin is 28.30%. The profit margin is 21.40%.

Diageo plc has seen returns on assets of 8.20%, and on investment, 13.10%. Return on equity is 28.30%. Price/Earnings to growth ratio is 3.51. Price/Sales ratio is at a value of 5.09, with Price/book ratio coming to 6.26 and Price/cash is 33.67, and finally Price/Free cash Flow is 89.04.

The simple moving averages are 0.89% and 6.38% for 20 day and 200 day simple moving average respectively. For the 52 week high and low the 52 week high is -1.74% and the 52 week low is 17.47%.

Diageo plc has a dividend yield of 3.42%, with a current price of 114.2. The ability to pay this means the payout ratio is 66.20%. This is in an industry, Beverages – Wineries & Distillers, with equally high dividends from other companies in this sector, which it is Consumer Goods. Diageo plc is based in United Kingdom.

Performance in the Beverages – Wineries & Distillers industry means that Diageo plc has seen performance for the past week of 1.46%, with performance for the month coming to -2.28%. Looking at the data for the quarter it is at a value of 10.88%, and for the half year the performance is 5.08%. Volatility for this week is 1.16% and for the month this is 0.95%.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Tony Dabbs

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