How to buy Diageo shares | 2645.5p

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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

  1. Choose a platform. If you're a beginner, our share-dealing table below can help you choose.
  2. Open your account. You'll need your ID, bank details and national insurance number.
  3. Confirm your payment details. You'll need to fund your account with a bank transfer, debit card or credit card.
  4. Search the platform for stock code: DGE in this case.
  5. Research Diageo shares. The platform should provide the latest information available.
  6. Buy your Diageo shares. It's that simple.

How has Coronavirus impacted Diageo's share price?

Since the stock market crash in March caused by coronavirus, Diageo's share price has had significant negative movement.

Its last market close was 2626.5p, which is 15.26% down on its pre-crash value of 3099.5p and 28.08% up on the lowest point reached during the March 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 £847.83.

Diageo share price

Use our graph to track the performance of DGE stocks over time.

Diageo shares at a glance

Information last updated 2020-09-29.
Open2670.5p
High2679p
Low2626.5p
Close2645.5p
Previous close2644.5p
Change 1p
Change % 0.038%
Volume 3,415,299
Information last updated 2020-10-20.
52-week range2050.6p - 3297p
50-day moving average 2609.2p
200-day moving average 2704.4504p
Wall St. target price2916.05p
PE ratio 44.783
Dividend yield 0.7p (2.63%)
Earnings per share (TTM) 59.9p
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Share dealing platform comparison

Table: sorted by promoted deals first
Data indicated here is updated regularly
Name Product Price per trade Frequent trader rate Platform fees Brand description
Fineco
£2.95
£2.95
Zero platform fee
Your first 50 trades are free with Fineco, until 31/12/2020. T&Cs apply.
Fineco Bank is good for share traders and investors looking for a complete platform and wide offer. Capital at risk.
IG
0% commission on US shares, and £3 on UK shares
From £5
£0 - £24 per quarter
IG is good for experienced traders, and offers learning resources for beginners, all with wide access to shares, ETFs and funds. Capital at risk.
eToro Free Stocks
0% commission, no markup, no ticket fee, no management fee
N/A
Withdrawal fee & GDP to USD deposit conversion
Capital at risk. 0% commission but other fees may apply.
Hargreaves Lansdown Fund and Share Account
£11.95
£5.95
No fees
Cashback offer: Take control of your money and transfer investments to HL – get cashback as a thank you. Terms apply.
Hargreaves Lansdown is the UK's number one platform for private investors, with the depth of features you'd expect from an established platform. Capital at risk.
Interactive Investor
From £7.99 on the Investor Service Plan
From £7.99 on the Investor Service Plan
No transfer fees or exit fees. £9.99 a month on the Investor Service Plan
Open an ISA, Trading Account or SIPP you will get £100 of free trades to buy or sell any investment (new customers only).
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. Capital at risk.
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Compare up to 4 providers

Data indicated here is updated regularly
Name Product Minimum deposit Maximum annual fee Price per trade Brand description
Moneyfarm stocks and shares ISA
£1500
0.75%
£0
Hargreaves Lansdown stocks and shares ISA
£100
0.45%
£11.95
Hargreaves Lansdown is the UK's biggest wealth manager. It's got everything you'll need, from beginners to experienced investors. Capital at risk.
Interactive Investor stocks and shares ISA
Any lump sum or £25 a month
£119.88
£7.99
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. Capital at risk.
Saxo Markets stocks and shares ISA
No minimum deposit requirement
0.12%
£8.00
Saxo Markets offers a wide access to a range of stocks, ETFs and funds. Capital at risk.
AJ Bell stocks and shares ISA
£500
0.25%
£9.95
AJ Bell is a good all-rounder for people who to choose between shares, funds, ISAs and pensions. Capital at risk.
Fidelity stocks and shares ISA
£1000 or a regular savings plan from £50
0.35%
£10.00
Fidelity is another good all-rounder, offering a good package at a decent price. Not suited for trading shares. Capital at risk.
Nutmeg stocks and shares ISA
£100
0.75%
£0
Nutmeg offers three types of portfolios. Choose the one that goes with your investment style. Capital at risk.
Legal & General stocks and shares ISA
Legal & General stocks and shares ISA
£100 or £20 a month
0.61%
N/A
Legal & General is a big financial services company which offers insurance, lifetime mortgage, pensions and stocks and shares ISAs. Capital at risk.
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Compare up to 4 providers

Data indicated here is updated regularly
Name Product Minimum investment Choose from Annual fee Brand description
Moneyfarm Pension
£1,500 (initial investment)
7 funds
0.35%-0.75%
Moneyfarm has pensions that are matched against your risk appetite, goals and planned retirement date. Capital at risk.
AJ Bell Pension
£1,000
Over 2,000 funds
0.05-0.25%
AJ Bell has two different pension options, a self managed pension and one that is managed for you. Capital at risk.
PensionBee Pension
No minimum
7 funds
0.5% - 0.95%
Pension Bee is a newbie in the pension market. It helps consolidate your pension plans into one place. Capital at risk.
Hargreaves Lansdown Pension
£100 or £25 a month
2,500 funds
0-0.45%
Hargreaves Lansdown is the UK's biggest wealth manager. It's got three different retirement options. Capital at risk.
Interactive Investor Pension
Any lump sum or £25 a month
Over 3,000 funds
£10/month
interactive investor is a flat-fee platform, which makes it cost effective for larger portfolios. Capital at risk.
Saxo Markets Pension
Saxo Markets Pension
£10
Over 11,000 funds
No annual fee
Saxo Markets gives flexibility and control over your investment strategy. Capital at risk.
Moneybox Pension
£1
3 funds
0.15% - 0.45% charged monthly
Manage your money with an easy-to-use Moneybox app. Capital at risk.
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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. Capital is 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.

Diageo price performance over time

Historical closes compared with the last close of 2645.5p

1 week (2020-10-15) 0.70%
1 month (2020-09-25) 4.92%
3 months (2020-07-24) -5.38%
6 months (2020-04-24) -0.36%
1 year (2019-10-25) -15.24%
2 years (2018-10-25) -1.38%
3 years (2017-10-25) 4.17%
5 years (2015-10-23) 42.35%

Is Diageo under- or over-valued?

Valuing Diageo stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Diageo's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.

Diageo's P/E ratio

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 45x. In other words, Diageo shares trade at around 45x 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 PEG ratio

Diageo's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 7.4421. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.

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

Diageo's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £3.8 billion.

The EBITDA is a measure of a Diageo's overall financial performance and is widely used to measure a its profitability.

To put Diageo's EBITDA into context you can compare it against that of similar companies.

Diageo financials

Revenue TTM £11.8 billion
Operating margin TTM 29.73%
Gross profit TTM £7.1 billion
Return on assets TTM 6.76%
Return on equity TTM 15.64%
Profit margin 11.99%
Book value 2.9p
Market capitalisation £61.8 billion

TTM: trailing 12 months

Diageo's 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.

When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.

Diageo's total ESG risk score

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 10/01/2020) 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.

Diageo's environmental score

Environmental score: 0.95/100

Diageo's social score

Social score: 2.78/100

Diageo's governance score

Governance score: 5.42/100

Diageo's controversy score

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

Diageo plc was last rated for ESG on: 2020-10-01.

Total ESG score 14.15
Total ESG percentile 8.44
Environmental score 0.95
Social score 2.78
Governance score 5.42
Level of controversy 3

Diageo share dividends

Dividend payout ratio: 11844.07% of net profits

Recently Diageo has paid out, on average, around 11844.07% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 2.63% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Diageo shareholders could enjoy a 2.63% return on their shares, in the form of dividend payments. In Diageo's case, that would currently equate to about 0.7p 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 13 August 2020 (the "ex-dividend date").

Diageo's dividend payout ratio is perhaps best considered in relation to those of similar companies.

Have Diageo's shares ever split?

Diageo's shares were split on a 1136:1000 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 1136 shares. This wouldn't directly have changed the overall worth of your Diageo shares – just the quantity. However, indirectly, the new 12% lower share price could have impacted the market appetite for Diageo shares which in turn could have impacted Diageo's share price.

Diageo share price volatility

Over the last 12 months, Diageo's shares have ranged in value from as little as 2050.6p up to 3297p. 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 0.2543. 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.

Diageo overview

Diageo plc, together with its subsidiaries, produces, markets, and sells alcoholic beverages. The company offers scotch, whisky, gin, vodka, rum, ready to drink products, Irish cream liqueur, raki, liqueur, wine, tequila, Canadian whisky, American whiskey, adult beverages, cachaça, spirits, and brandy, as well as beer, including cider and non-alcoholic products. Diageo plc provides its products primarily under the Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray, and Guinness brands. The company also offers its products under the Crown Royal, Yenì Raki, Shui Jing Fang, Johnnie Walker Blue Label, Bulleit Bourbon, Don Julio, Buchanan's, J?B, Old Parr, Tanqueray No. TEN, Ron Zacapa Centenario XO, Casamigos, Bundaberg, McDowell's No. 1, Ypióca, Lagavulin, The Singleton of Glen Ord, Johnnie Walker Gold Label Reserve, Windsor, Black&White, Cîroc, Ketel One vodka, and Talisker brands. It has operations in North America, Europe, Turkey, Africa, Latin America, the Caribbean, the Asia Pacific, and internationally. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.

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