# Diageo plc (DGE.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Consumer Defensive / Beverages. Price 1625p, market value 36.1 billionp.

## Valuation
- **P/E (trailing): 28.0×** (5-yr avg 1962.6×, 3-yr avg 1705.4×). Diageo plc trades at 28.0× trailing earnings, well below its own five-year average of 1962.6×: cheap by its own standards. The Consumer Defensive median in the September 2026 study was 20.1×. Forward P/E is 12.5×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 2.5×**. Each dollar of revenue is priced at 2.5×.
- **Price / book: 4.5×**. The shares trade at 4.5× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 11.3×**. Enterprise value is 11.3× operating earnings before depreciation, the multiple that ignores how the company is financed.
- **Free-cash-flow yield: 6.5%** (5-yr avg 0.1%). Free cash flow equals 6.5% of the market value, above its five-year average of 0.1%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 3.6%**. The inverse of the P/E: 3.6% of the price is earned each year.

## Profitability
- **Gross margin: 59.5%**. Diageo plc keeps 59.5% of revenue after the direct cost of what it sells.
- **Operating margin: 16.1%**. 16.1% of revenue is left after running the business, a healthy level in most sectors.
- **Net margin: 8.8%**. 8.8% of each dollar of sales reaches the bottom line.
- **Return on equity: 16.0%**. 16.0% on shareholders' equity is solid.
- **Return on invested capital: 7.7%**. Return on all capital, debt included, is 7.7%.
- **Return on assets: 3.7%**. Each dollar of assets produces 3.7% of profit.

## Growth
- **Revenue growth (1 yr): -3.0%** (3-yr 6.6%/yr, 5-yr 9.1%/yr). Revenue fell 3.0% over the last year, against 9.1% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -26.5%** (3-yr -20.5%/yr, 5-yr -7.2%/yr). Earnings per share fell 26.5%, slower than revenue, so margins compressed.
- **Free-cash-flow growth (3 yr): -2.2%/yr**. Free cash flow has compounded at -2.2% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 2.04**. Debt is 2.04 times equity, a leveraged balance sheet that needs steady cash flow to service.
- **Net debt / EBITDA: 3.3×**. It would take 3.3 years of operating earnings to repay net borrowings, above the 3× level most lenders treat as comfortable.
- **Interest coverage: 2.9×**. Operating profit covers interest 2.9×, thin but manageable.
- **Current ratio: 1.60** (quick 0.62). Current assets cover the next year's liabilities 1.60 times.
- **Altman Z-score: 1.77**. A Z-score of 1.77 is in the distress zone, a signal to examine the balance sheet closely.
- **Piotroski F-score: 5/9**. 5 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 2.73%** (0p per share, trailing). Diageo plc yields 2.73%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 106%** (58% of free cash flow). The dividend exceeds earnings (106% payout), though free cash flow still covers it.
- **Consecutive years of increases: 1**. 1 straight year of increases.
- **Dividend growth (5 yr): 2.6%/yr** (1-yr 0.1%). The dividend has grown 2.6% a year over five years.
- **Shareholder yield: 2.7%**. Dividends plus net buybacks return 2.7% of the market value a year.

## Analyst view
- **Analyst consensus: buy** (22 analysts). 22 analysts cover Diageo plc; the consensus is buy, with an average price target of 1994p (+23% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): -19.9%** (YTD 1.6%, 3-mo 8.7%). The shares are down 19.9% over twelve months including dividends.
- **From 52-week high: -20.2%** (25.4% above the low). Trading 20% below its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 42**. An RSI of 42 is neutral.
- **Beta (1 yr): 0.63** (volatility 31%). Beta of 0.63 against the FTSE All-Share: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=DGE.L · Page: https://foliofundamentals.com/stocks/dge.l

Not investment advice.