Reviewing Diageo (DGEAF) and Its Rivals

Institutional and Insider Ownership

33.3% of Diageo shares are held by institutional investors. Comparatively, 36.7% of shares of all “Beverages” companies are held by institutional investors. 19.0% of shares of all “Beverages” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Diageo and its peers revenue, earnings per share (EPS) and valuation.

Diageo’s peers have higher revenue and earnings than Diageo. Diageo is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Diageo and its peers’ net margins, return on equity and return on assets.

Dividends

Diageo pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. Diageo pays out 66.3% of its earnings in the form of a dividend. As a group, “Beverages” companies pay a dividend yield of 3.1% and pay out 49.0% of their earnings in the form of a dividend. Diageo lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Diageo peers beat Diageo on 5 of the 9 factors compared.

Diageo Company Profile

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Diageo plc, together with its subsidiaries, engages in the production, marketing, and sale of alcoholic beverages. It offers scotch, gin, vodka, rum, raki, liqueur, wine, tequila, Chinese white spirits, cachaça, and brandy, as well as beer, including cider and flavoured malt beverages. The company also provides Canadian, Irish, American, and Indian-Made Foreign Liquor whiskies, as well as ready to drink and non-alcoholic products. It provides its products primarily under the Johnnie Walker, Guinness, Tanqueray, Baileys, Smirnoff, Captain Morgan, Crown Royal, Don Julio, Cîroc, Buchanan's, Casamigos, J&B, and Ketel One brands. The company operates in the United States, the United Kingdom, Turkey, Australia, Korea, India, Greater China, Brazil, Mexico, South Africa, Nigeria, and internationally. Diageo plc was incorporated in 1886 and is headquartered in London, the United Kingdom.