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Is Diageo plc(NYSE: DEO), a large market cap stock a smart buy?

With a market cap of has a large market cap size. Diageo plc (NYSE: DEO) has been on the stock market since its IPO date on the 5/13/1996. Diageo plc is in the Beverages – Wineries & Distillers industry and Consumer Goods sector. Average volume for Diageo plc, is 862.16, and so far today it has a volume of 151105. Performance year to date since the 5/13/1996 is 9.24%.

To help you determine whether Diageo plc is undervalued the following values will help you decide. P/E is 25.05 and forward P/E is 18.87. PEG perhaps more useful shows that Diageo plc has a value for PEG of 3.68. P/S ratio is 5.34 and the P/B ratio is 6.57. The P/Cash and P/Free cash flow is 35.34 and 93.46 respectively.

At the current price Diageo plc is trading at, 115.13 (-0.49% today), Diageo plc has a dividend yield of 3.33%, and this is covered by a payout ratio of 66.20%. Earnings per share (EPS) is 4.62, and this is looking to grow in the next year to 10.65% after growing -5.80% this past year. EPS growth quarter over quarter is 31.40%, and 12.80% for sales growth quarter over quarter.

The number of shares outstanding is 626.77, and the number of shares float is 625.66. The senior management bring insider ownership to 0.70%, and institutional ownership is at 11.90%. The float short is 0.42%, with the short ratio at a value of 3.02. Management has seen a return on assets of 8.20%, and also a return on investment of 12.70%.

The ability for Diageo plc, to deal with debt, means it current ratio is 1.4, and quick ratio is 0.7. Long term debt/equity is 1 and total debt/equity is 1.28. In terms of margins, Diageo plc has a gross margin of 59.50%, with its operating margin at 28.30%, and Diageo plc has a profit margin of 21.40%.

The 52 week high is -0.87%, with 18.42% being its 52 week low. The 20 day simple moving average is 4.67% and the 200 day simple moving average is 7.46%.

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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