The coronavirus outbreak has forced pubs and bars to close in the UK, which will likely have an affect on alcoholic beverage sales. As a result, the Diageo share price has been impacted, but some investors may see this as a good time to buy Diageo stock. Diageo plc (LON: DGE) is a multinational alcoholic beverages company based in the UK. It is the world’s second largest distiller, and owns brands including Smirnoff, Johnnie Walker, Guinness and Gordon’s.
How to buy shares in Diageo
- Choose a platform. If you're a beginner, our share-dealing table below can help you choose.
- Open your account. You'll need your ID, bank details and national insurance number.
- Confirm your payment details. You'll need to fund your account with a bank transfer, debit card or credit card.
- Search the platform for stock code: DGE in this case.
- Research Diageo shares. The platform should provide the latest information available.
- Buy your Diageo shares. It's that simple.
What's in this guide?
- Can I buy shares in Diageo?
- Has coronavirus impacted Diageo shares?
- Diageo shares summary
- Compare share dealing platforms
- Is Diageo stock a buy or sell?
- Performance over time
- Is Diageo suitable for ethical investing?
- Are Diageo shares over-valued?
- How volatile are Diageo shares?
- Does Diageo pay a dividend?
- Have Diageo shares ever split?
- Other common questions
How has coronavirus impacted Diageo's share price?
Since the stock market crash that started in February 2020, Diageo's share price has had significant positive movement.
Its last market close was 3620.5p, which is 14.39% up on its pre-crash value of 3099.5p and 76.56% up on the lowest point reached during the March 2020 crash when the shares fell as low as 2050.6p.
If you had bought £1,000 worth of Diageo shares at the start of February 2020, those shares would have been worth £715.49 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth £1,168.70.
Diageo share price (LSE:DGE)Use our graph to track the performance of DGE stocks over time.
Diageo shares at a glance
|52-week range||2473.4517p - 3666p|
|50-day moving average||3539.6p|
|200-day moving average||3450.6748p|
|Wall St. target price||3835p|
|Dividend yield||72.6p (2.01%)|
|Earnings per share (TTM)||113.4p|
Fees for buying 10x Diageo shares with popular platforms
Share prices fluctuate in real time, so the costs presented here should be considered as a guide only. They do not incorporate stamp duty. Always refer to the platform itself for availability and pricing – which may differ from our information.
|Platform||Platform fee||Min. initial deposit||Trading fee estimate|
|Capital at risk|
|Capital at risk|
|Capital at risk|
|Capital at risk|
|Capital at risk|
|£9.99 per month||No minimum||£7.99
|Capital at risk|
|£36 per year||£20||£9.50
|Capital at risk|
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Is it a good time to buy Diageo stock?
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
Is Diageo under- or over-valued?
Valuing a stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of overall performance. However, analysts commonly use some key metrics to help gauge value.
Diageo's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 32x. In other words, Diageo shares trade at around 32x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, Diageo's P/E ratio is best considered in relation to those of others within the beverages-wineries & distilleries industry or those of similar companies.
Diageo's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 3.2824. Higher PEG ratios such as this can be interpreted as meaning the shares offer worse value given the current rate of growth.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Diageo's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
However, it's sensible to consider Diageo's PEG ratio in relation to those of similar companies.
Diageo's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £4.1 billion.
The EBITDA is a measure of a Diageo's overall financial performance and is widely used to measure a its profitability.
To put that into context you can compare it against similar companies.
|Revenue TTM||£12.7 billion|
|Operating margin TTM||29.46%|
|Gross profit TTM||£7.7 billion|
|Return on assets TTM||7.19%|
|Return on equity TTM||33.18%|
|Market capitalisation||£84.8 billion|
TTM: trailing 12 months
Environmental, social and governance track record
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Diageo.
Total ESG risk score
Diageo's total ESG risk: 14.15
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Diageo's overall score of 14.15 (as at 01/01/2019) is excellent – landing it in it in the 8th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Diageo is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare Diageo's total ESG risk score against those of similar companies.
- Constellation Brands (STZ.US): 21.89
- Brown-Forman Corporation (BF-B.US): 27.77
- Fortune Brands Home-and-Security (FBHS.US): 25.05
Diageo's environmental score: 0.95/100
Diageo's social score: 2.78/100
Diageo's governance score: 5.42/100
Diageo's controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, Diageo scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that Diageo hasn't always managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
Environmental, social, and governance (ESG) summary
|Total ESG score||14.15|
|Total ESG percentile||8.44|
|Level of controversy||3|
Diageo share dividends
Dividend yield: 2.01% of stock value
Forward annual dividend yield: 1.99% of stock value
Dividend payout ratio: 65.07% of net profits
Diageo has recently paid out dividends equivalent to 2.01% of its share value annually.
Diageo has paid out, on average, around 65.07% of recent net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 1.99% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), shareholders could enjoy a 1.99% return on their shares, in the form of dividend payments. In Diageo's case, that would currently equate to about 72.6p per share.
Diageo's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
The latest dividend was paid out to all shareholders who bought their shares by 26 August 2021 (the "ex-dividend date").
Diageo's dividend yield is perhaps best considered in relation to those of similar companies.
- Constellation Brands (STZ.US): 1.38% (1.39% forward annual dividend yield)
- Brown-Forman Corporation (BF-B.US): 1.03% (1.03% forward annual dividend yield)
- Fortune Brands Home-and-Security (FBHS.US): 1.04% (1.08% forward annual dividend yield)
Have Diageo's shares ever split?
Diageo's shares were split on a 864:1000 basis on 2 February 1998. So if you had owned 1000 shares the day before before the split, the next day you'd have owned 864 shares. This wouldn't directly have changed the overall worth of your Diageo shares – just the quantity. However, indirectly, the new 15.7% higher share price could have impacted the market appetite for Diageo shares which in turn could have impacted Diageo's share price.
Share price volatility
Over the last 12 months, Diageo's shares have ranged in value from as little as 2473.4517p up to 3666p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while Diageo's is 0.4564. This would suggest that Diageo's shares are less volatile than average (for this exchange).
To put Diageo's beta into context you can compare it against those of similar companies.
- Constellation Brands (STZ.US): 1.163
- Brown-Forman Corporation (BF-B.US): 0.8169
- Fortune Brands Home-and-Security (FBHS.US): 1.619
Shares similar to Diageo
Diageo in the news
Diageo North America : Donates to the Seattle ‘Raising the Bar' Recovery Fund to Help Reactivate the City's Hospitality Industry
Diageo : distilleries first to achieve water stewardship certification globally
Diageo : Baileys launches global Halloween advertising campaign “Witches”
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