Latest Ratios: P/E Ratio 20.3x · EV/EBITDA 11.6x · ROE 18.6%. (1997–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $47.9B | $56.2B | $70.6B | $98.5B | $101.2B | $112.4B | $79.1B | $104.6B | $89.8B | $75.6B | $71.1B |
| Enterprise Value | $70.1B | $78.4B | $90.9B | $113.5B | $114.9B | $124.4B | $93.0B | $116.4B | $99.1B | $83.4B | $80.1B |
| P/E Ratio → | 20.31 | 23.78 | 18.22 | 27.98 | 28.45 | 43.57 | 56.00 | 33.14 | 29.03 | 27.74 | 28.51 |
| P/S Ratio | 2.36 | 2.77 | 3.48 | 6.07 | 5.97 | 8.83 | 6.73 | 8.13 | 7.39 | 6.27 | 6.10 |
| P/B Ratio | 3.64 | 4.26 | 5.85 | 10.66 | 10.64 | 13.33 | 9.37 | 10.30 | 7.67 | 6.28 | 6.98 |
| P/FCF | 17.83 | 20.92 | 15.49 | 28.83 | 35.66 | 37.11 | 48.82 | 40.59 | 35.93 | 28.91 | 34.80 |
| P/OCF | 11.14 | 13.07 | 11.64 | 21.72 | 25.72 | 30.75 | 34.09 | 32.20 | 29.13 | 24.13 | 27.89 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 3.87 | 4.49 | 6.99 | 6.78 | 9.77 | 7.92 | 9.04 | 8.15 | 6.92 | 6.87 |
| EV / EBITDA | 11.58 | 12.95 | 14.00 | 21.00 | 21.43 | 29.76 | 20.42 | 26.35 | 23.20 | 16.74 | 22.82 |
| EV / EBIT | 16.16 | 16.89 | 13.48 | 21.25 | 21.77 | 32.41 | 26.56 | 28.22 | 26.02 | 23.99 | 25.84 |
| EV / FCF | — | 29.19 | 19.97 | 33.22 | 40.50 | 41.07 | 57.43 | 45.15 | 39.63 | 31.92 | 39.23 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 60.1% | 60.1% | 60.2% | 59.7% | 55.9% | 60.4% | 60.4% | 62.2% | 61.9% | 61.2% | 53.5% |
| Operating Margin | 21.4% | 21.4% | 29.6% | 27.0% | 28.7% | 29.3% | 29.9% | 31.4% | 32.1% | 38.4% | 26.7% |
| Net Profit Margin | 11.6% | 11.6% | 19.1% | 21.6% | 20.9% | 20.9% | 12.0% | 24.6% | 24.8% | 22.1% | 19.3% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 18.6% | 18.6% | 36.3% | 37.4% | 39.4% | 31.5% | 15.2% | 28.9% | 25.5% | 24.0% | 23.1% |
| ROA | 5.0% | 5.0% | 9.6% | 9.8% | 10.3% | 8.2% | 4.4% | 10.4% | 10.3% | 9.3% | 8.3% |
| ROIC | 9.6% | 9.6% | 15.9% | 13.8% | 16.6% | 12.9% | 11.9% | 14.1% | 14.3% | 17.6% | 12.3% |
| ROCE | 11.7% | 11.7% | 18.9% | 15.7% | 18.4% | 14.5% | 13.7% | 17.0% | 17.1% | 20.8% | 14.6% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 1.85 | 1.85 | 1.78 | 1.78 | 1.68 | 1.80 | 2.05 | 1.25 | 0.86 | 0.77 | 1.02 |
| Debt / EBITDA | 4.03 | 4.03 | 3.31 | 3.04 | 2.99 | 3.63 | 3.79 | 2.87 | 2.37 | 1.86 | 2.95 |
| Net Debt / Equity | — | 1.68 | 1.69 | 1.62 | 1.44 | 1.42 | 1.65 | 1.16 | 0.79 | 0.65 | 0.89 |
| Net Debt / EBITDA | 3.67 | 3.67 | 3.14 | 2.77 | 2.56 | 2.87 | 3.06 | 2.66 | 2.17 | 1.58 | 2.58 |
| Debt / FCF | — | 8.27 | 4.47 | 4.39 | 4.84 | 3.96 | 8.61 | 4.56 | 3.70 | 3.00 | 4.43 |
| Interest Coverage | 4.48 | 4.48 | 5.25 | 6.03 | 8.35 | 8.48 | 5.29 | 8.45 | 9.14 | 7.82 | 6.02 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.63 | 1.63 | 1.53 | 1.63 | 1.53 | 1.60 | 1.77 | 1.34 | 1.37 | 1.30 | 1.43 |
| Quick Ratio | 0.64 | 0.64 | 0.55 | 0.62 | 0.69 | 0.76 | 0.88 | 0.56 | 0.58 | 0.58 | 0.69 |
| Cash Ratio | 0.25 | 0.25 | 0.11 | 0.19 | 0.30 | 0.40 | 0.52 | 0.15 | 0.14 | 0.18 | 0.20 |
| Asset Turnover | — | 0.41 | 0.45 | 0.46 | 0.46 | 0.40 | 0.35 | 0.41 | 0.41 | 0.42 | 0.41 |
| Inventory Turnover | 0.76 | 0.76 | 0.83 | 0.86 | 0.84 | 0.83 | 0.81 | 0.89 | 0.92 | 0.98 | 0.93 |
| Days Sales Outstanding | — | 56.41 | 68.27 | 66.04 | 60.08 | 80.10 | 66.59 | 84.84 | 77.97 | 73.70 | 67.48 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 4.8% | 4.1% | 3.2% | 1.7% | 1.9% | 1.5% | 2.1% | 1.6% | 1.8% | 2.0% | 2.0% |
| Payout Ratio | 97.6% | 97.6% | 57.9% | 46.5% | 53.2% | 61.9% | 116.8% | 51.4% | 52.3% | 56.9% | 64.3% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.9% | 4.2% | 5.5% | 3.6% | 3.5% | 2.3% | 1.8% | 3.0% | 3.4% | 3.6% | 3.5% |
| FCF Yield | 5.6% | 4.8% | 6.5% | 3.5% | 2.8% | 2.7% | 2.0% | 2.5% | 2.8% | 3.5% | 2.9% |
| Buyback Yield | 0.0% | 0.0% | 2.4% | 1.3% | 2.5% | 0.1% | 1.6% | 2.7% | 1.7% | 0.1% | 0.0% |
| Total Shareholder Yield | 4.8% | 4.1% | 5.5% | 3.0% | 4.3% | 1.6% | 3.7% | 4.2% | 3.4% | 2.1% | 2.0% |
| Shares Outstanding | — | $557M | $560M | $568M | $581M | $586M | $589M | $607M | $624M | $631M | $630M |
Includes 30+ ratios · 29 years · Updated daily
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Quick answers to the most common questions about buying DEO stock.
Diageo plc's current P/E ratio is 20.3x. The historical average is 31.8x. This places it at the 4th percentile of its historical range.
Diageo plc's current EV/EBITDA is 11.6x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 21.2x.
Diageo plc's return on equity (ROE) is 18.6%. The historical average is 27.8%.
Based on historical data, Diageo plc is trading at a P/E of 20.3x. This is at the 4th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Diageo plc's current dividend yield is 4.79% with a payout ratio of 97.6%.
Diageo plc has 60.1% gross margin and 21.4% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Diageo plc's Debt/EBITDA ratio is 4.0x, indicating high leverage. A ratio above 4x may signal elevated financial risk.
Key Metrics
Top Statement Risk
Earnings volatility amid stagnation
Premium Multiple Amidst Decelerating Profitability
Diageo's forward P/E of 19.55 and EV/EBITDA of 11.29 represent a premium to its historical range and peers, pricing in a recovery that is not yet evident in its recent negative EPS and contracting margins.
The current valuation multiples suggest the market is maintaining a long-term premium for Diageo's brand portfolio and pricing power, yet they appear disconnected from the near-term reality of a net loss in 2026Q4 and shrinking operating margins. The premium is particularly stark when contrasted with peer Constellation Brands' forward P/E of ~14x, implying investors are paying significantly more for Diageo's growth prospects despite its recent performance. This valuation gap warrants scrutiny, as any further deterioration in operational metrics could lead to a multiple compression toward peer levels.
Margin Compression Signals Core Power Erosion
Diageo's gross margin has contracted by over 500 basis points from its 2022 peak to 57.7% in 2026Q4, while the net margin has swung to negative 2.8%, suggesting a fundamental erosion of its premium pricing advantage and cost control.
The steady decline in gross margin from 62.9% to 57.7% over the period indicates that input cost inflation or an unfavorable product mix shift is outpacing any pricing actions. More concerning is the volatility in net margin, which has swung from a peak of 24.7% to a loss in the most recent quarter, indicating that operating leverage has turned negative as revenue stagnates. This pattern suggests that Diageo's historical profitability was more cyclical than structural, and the current environment is testing the true earning power of its business model.
Return on Capital Hits Cyclical Trough
Return on Invested Capital (ROIC) has deteriorated to 5.0% in 2026Q4 from a peak of 9.7% in 2022Q2, indicating that the company is generating significantly less value from its capital base as its balance sheet expands.
The declining ROIC trend, which has nearly halved from its highs, is driven by both margin compression and a substantial increase in the asset base, primarily through acquisitions and inventory accumulation. With ROIC at 5.0% and the weighted average cost of capital (WACC) likely above this level for a consumer staples company, the implication is that recent capital deployment is not currently creating shareholder value. This downward trajectory in returns is a critical concern and must be reversed for the company's premium valuation to be sustained.
Leverage Comfortably Serviced but Rising
Diageo's Debt-to-Equity ratio of 1.71 and Debt-to-EBITDA of 8.39x in 2026Q4 indicate a leveraged balance sheet where the latter metric has spiked due to declining earnings, though interest coverage remains adequate at 4.37x.
While the Debt-to-Equity ratio has been relatively stable around 1.7-1.8x, the sharp rise in Debt-to-EBITDA to 8.39x is a direct consequence of collapsing profitability, not a significant increase in debt issuance. The interest coverage ratio of 4.37x, though down from a peak of 13.61x, still suggests the company can meet its interest obligations. However, the deteriorating coverage trend, if sustained alongside weak earnings, could increase refinancing risk and pressure credit ratings, warranting close monitoring of the Debt/EBITDA trajectory.
Working Capital Seesaws Obscuring Operational Drag
Diageo's Cash Conversion Cycle expanded to 129 days in 2026Q4, driven by a sharp increase in Days Inventory Outstanding to 247 days, revealing significant working capital inefficiency that is masking underlying operational challenges.
The extreme volatility in the CCC, from 85 days to 158 days and back to 129 days within two years, points to profound issues in inventory and supplier management. The Days Inventory Outstanding of 247 days in the latest quarter is exceptionally high, even for a company with aging spirits, and suggests a buildup of stock that may not align with current demand, potentially corroborating reports of distributor destocking. This inefficiency ties up capital and compresses cash flow, making the reported Free Cash Flow margin of 18.3% less indicative of sustainable core cash generation.
The Overlooked Valuation Flaw in Asset-Heavy Spirits
The most commonly misapplied ratio is Return on Equity (ROE), which is heavily distorted by Diageo's large intangible asset base and goodwill, making it a misleading indicator of true operational efficiency compared to ROIC.
Standard ROE calculations are inflated by significant goodwill and intangible assets (29% of total assets) from past acquisitions, as seen in the wide divergence between ROE and ROIC. For instance, in 2022Q2, ROE was 22.1% while ROIC was 9.7%. In this asset-heavy business model, ROE fails to capture the capital intensity and long investment cycles inherent in aging inventory. Investors relying solely on ROE may overestimate Diageo's efficiency, whereas ROIC provides a more accurate measure of how well the company is deploying its total capital base to generate returns.