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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 68352.94. 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 109.44 (with a change from open of 0.87%), this in conjunction with a target price of 124.86. Volume today has so far reached 328664, with an average volume of about 593.3. The GAP for this stock, is -0.73%.

The P/E ratio is 24.31, bringing the forward P/E to a value of 17.83. The current EPS for Diageo plc, is 4.5, 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 3.20%.

Looking further into the growth statistics for Diageo plc, EPS is looking like it will grow 10.25% 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 12.20%. Shares outstanding is 625.37, while shares float is at a value of 625.16. Float short for Diageo plc is 0.39% and the short ratio is 4.1.

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 3.57. Price/Sales ratio is at a value of 5.17, with Price/book ratio coming to 6.37 and Price/cash is 34.21, and finally Price/Free cash Flow is 90.47.

The simple moving averages are -4.09% and 1.35% for 20 day and 200 day simple moving average respectively. For the 52 week high and low the 52 week high is -6.98% and the 52 week low is 12.57%.

Diageo plc has a dividend yield of 3.52%, with a current price of 109.44. 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 -4.49%, with performance for the month coming to -1.45%. Looking at the data for the quarter it is at a value of -2.05%, and for the half year the performance is 0.38%. Volatility for this week is 0.97% and for the month this is 0.93%.

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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Peter Clarke

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