Diageo Plc (DEO)
Key Statistics
EV/EBIT = 16.8x
ROE = 46%
Debt/Equity = 217%
FCF Yield = 2.4%
Dividend Yield = 2.7%
Market Capitalization = $81.72 billion
The Company
Diageo (DEO) commands a dominant position in the alcoholic beverage industry, boasting a stellar lineup of some of the finest and most iconic brands. Their impressive portfolio spans a wide range of spirits and beers, including renowned names like Johnnie Walker, Smirnoff, Guinness, Captain Morgan, Ketel One, Don Julio, Casamigos, Lagavulin, Tanqueray, Ciroc, Baileys, and many others. Notably, many of these brands are market leaders in their respective categories.
At the heart of Diageo's success is its commitment to spirits, constituting 79% of its sales. Scotch is the dominant product within this category, commanding 25% of the company's total sales. Following Scotch, tequila represents 12% of sales, and Vodka is 9%. Spirits are a strong focus because they command more premium pricing than other alcoholic beverages.
Diageo traces its roots back to 1997, when Grand Metropolitan and Guinness merged to form the entity we know today. This merger marked a turning point, propelling Diageo into a growth trajectory and leadership within the global drinks industry. Over the years, the company has strategically pursued mergers and acquisitions, positioning itself as a trailblazer in the market. While the industry exhibits a degree of concentration, Diageo remains attuned to opportunities for further acquisitions, particularly with smaller regional players.
Operating in nearly 180 countries, the company has a global reach, and its brands are recognized worldwide. Diageo's sales span various regions. North America takes the lead with 39%, Europe at 21%, Asia-Pacific at 19%, Africa at 10%, and Latin America at 11%.