Stock of the Day

September 1, 2021

Diageo (DEO)

$106.64
+$2.13 (+2.0%)
Market Cap: $59.32B

About Diageo

Diageo plc, together with its subsidiaries, engages in the production, marketing, and sale of alcoholic beverages. The company offers scotch, gin, vodka, rum, raki, liqueur, wine, tequila, Chinese white spirits, cachaça, and brandy, as well as beer, including cider and flavored malt beverages. It also provides Chinese, Canadian, Irish, American, and Indian-Made Foreign Liquor whiskies, as well as flavored malt beverages, ready to drink, and non-alcoholic products. The company provides its products under the Johnnie Walker, Crown Royal, J&B, Buchanan's, Smirnoff, Cîroc, Ketel One, Captain Morgan, Baileys, Don Julio, Casamigos, Tanqueray, Guinness, Shui Jing Fang, Yenì, McDowell's, Don Papa, Aviation American, Seagram, Seagram's 7 Crown, Zacapa, Black Dog, Black & White, Signature, Royal Challenge, Godawan, Antiquity, Gordon's, Old Parr, Windsor, Bundaberg, Ypióca, Bulleit, and Bell's brand names. It operates in the United States, the United Kingdom, Türkiye, Australia, Korea, India, Greater China, Brazil, Mexico, South Africa, Nigeria, and internationally. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.

Diageo Bull Case

Here are some ways that investors could benefit from investing in Diageo plc:

  • Diageo plc has recently been upgraded by multiple analysts, including UBS Group, which raised its rating from "sell" to "buy," indicating strong confidence in the company's future performance.
  • The stock price of Diageo plc is currently at $105.25, which is below its 1-year high of $149.24, suggesting potential for price appreciation as the market recognizes its value.
  • Diageo plc announced a semi-annual dividend of $1.62 per share, representing a yield of 3.8%. This provides a steady income stream for investors, which is particularly attractive in a low-interest-rate environment.
  • The company has a solid market capitalization of $58.55 billion, indicating its stability and ability to weather economic fluctuations, making it a safer investment choice.
  • With a consensus rating of "Hold" and a price target of $129.00, analysts suggest that there is room for growth, which could lead to capital gains for investors.

Diageo Bear Case

Investors should be bearish about investing in Diageo plc for these reasons:

  • Despite recent upgrades, one analyst still rates Diageo plc as a "sell," indicating that there are concerns about the company's performance that could affect its stock price negatively.
  • The company has a debt-to-equity ratio of 1.62, which suggests that it has a relatively high level of debt compared to its equity. This could pose risks if the company faces financial difficulties.
  • Diageo plc's quick ratio is 0.67, indicating that it may not have enough liquid assets to cover its short-term liabilities, which could be a concern for investors looking for financial stability.
  • The stock has experienced volatility, with a significant difference between its 1-year low of $104.80 and high of $149.24, which may deter risk-averse investors.
  • Analysts have mixed opinions on the stock, with three holding a "hold" rating, which may indicate uncertainty about the company's growth prospects in the near term.

Recent News