Diageo PLC Current Valuation vs. Operating Margin

DEO Stock  USD 126.70  2.21  1.78%   
Based on the measurements of profitability obtained from Diageo PLC's financial statements, Diageo PLC ADR may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess Diageo PLC's ability to earn profits and add value for shareholders. At this time, Diageo PLC's Days Sales Outstanding is very stable compared to the past year. As of the 11th of December 2024, Days Of Sales Outstanding is likely to grow to 85.18, while Price To Sales Ratio is likely to drop 1.78. As of the 11th of December 2024, Accumulated Other Comprehensive Income is likely to grow to about (86.5 M). In addition to that, Operating Income is likely to drop to about 3.1 B.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.460.6052
Way Down
Slightly volatile
Net Profit Margin0.05240.2404
Way Down
Very volatile
Operating Profit Margin0.150.3727
Way Down
Pretty Stable
Pretax Profit Margin0.09910.249
Way Down
Pretty Stable
Return On Assets0.03940.1076
Way Down
Very volatile
Return On Equity0.110.4876
Way Down
Pretty Stable
For Diageo PLC profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Diageo PLC to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Diageo PLC ADR utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Diageo PLC's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Diageo PLC ADR over time as well as its relative position and ranking within its peers.
  

Diageo PLC's Revenue Breakdown by Earning Segment

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Is Distillers & Vintners space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Diageo PLC. If investors know Diageo will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Diageo PLC listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.03)
Dividend Share
1.035
Earnings Share
6.91
Revenue Per Share
2.0142
Quarterly Revenue Growth
(0.01)
The market value of Diageo PLC ADR is measured differently than its book value, which is the value of Diageo that is recorded on the company's balance sheet. Investors also form their own opinion of Diageo PLC's value that differs from its market value or its book value, called intrinsic value, which is Diageo PLC's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Diageo PLC's market value can be influenced by many factors that don't directly affect Diageo PLC's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Diageo PLC's value and its price as these two are different measures arrived at by different means. Investors typically determine if Diageo PLC is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Diageo PLC's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Diageo PLC ADR Operating Margin vs. Current Valuation Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Diageo PLC's current stock value. Our valuation model uses many indicators to compare Diageo PLC value to that of its competitors to determine the firm's financial worth.
Diageo PLC ADR is rated as one of the top companies in current valuation category among its peers. It also is one of the top stocks in operating margin category among its peers . The ratio of Current Valuation to Operating Margin for Diageo PLC ADR is about  327,641,683,625 . At this time, Diageo PLC's Operating Profit Margin is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Diageo PLC's earnings, one of the primary drivers of an investment's value.

Diageo PLC's Earnings Breakdown by Geography

Diageo Current Valuation vs. Competition

Diageo PLC ADR is rated as one of the top companies in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Consumer Staples industry is currently estimated at about 100.82 Billion. Diageo PLC totals roughly 89.38 Billion in current valuation claiming about 89% of stocks in Consumer Staples industry.

Diageo Operating Margin vs. Current Valuation

Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Diageo PLC

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
89.38 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Diageo PLC

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.27 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.

Diageo Operating Margin Comparison

Diageo PLC is currently under evaluation in operating margin category among its peers.

Diageo PLC Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Diageo PLC, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Diageo PLC will eventually generate negative long term returns. The profitability progress is the general direction of Diageo PLC's change in net profit over the period of time. It can combine multiple indicators of Diageo PLC, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-91 M-86.5 M
Operating IncomeB3.1 B
Income Before TaxB2.9 B
Total Other Income Expense Net-2 B-1.9 B
Net Income3.1 B2.3 B
Income Tax Expense1.3 B655.9 M
Net Income Applicable To Common Shares4.3 B2.9 B
Net Income From Continuing Ops4.2 B3.2 B
Interest Income194 M116.3 M
Net Interest Income-925 M-878.8 M
Change To Netincome-691.1 M-656.6 M
Net Income Per Share 1.73  0.17 
Income Quality 1.06  0.34 
Net Income Per E B T 0.97  0.53 

Diageo Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Diageo PLC. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Diageo PLC position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Diageo PLC's important profitability drivers and their relationship over time.

Use Diageo PLC in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Diageo PLC position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Diageo PLC will appreciate offsetting losses from the drop in the long position's value.

Diageo PLC Pair Trading

Diageo PLC ADR Pair Trading Analysis

The ability to find closely correlated positions to Diageo PLC could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Diageo PLC when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Diageo PLC - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Diageo PLC ADR to buy it.
The correlation of Diageo PLC is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Diageo PLC moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Diageo PLC ADR moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Diageo PLC can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Diageo PLC position

In addition to having Diageo PLC in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

Run Processed Foods Thematic Idea Now

Processed Foods
Processed Foods Theme
Companies producing and distributing processed foods to retail sectors. The Processed Foods theme has 45 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Processed Foods Theme or any other thematic opportunities.
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When determining whether Diageo PLC ADR offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Diageo PLC's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Diageo Plc Adr Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Diageo Plc Adr Stock:
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You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
To fully project Diageo PLC's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Diageo PLC ADR at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Diageo PLC's income statement, its balance sheet, and the statement of cash flows.
Potential Diageo PLC investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Diageo PLC investors may work on each financial statement separately, they are all related. The changes in Diageo PLC's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Diageo PLC's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.