Stock fact sheet · data as of
Diageo plc (DEO): fair value, margin of safety and Wheel Score
Consumer Defensive · Beverages - Alcoholic · United Kingdom · ADR · Defensive
Is DEO undervalued?
DEO closed at 93.96 on 16 Oct 2026, which is 28% above the GLS average fair value of 73.48 from 9 models. 5 of them value the shares below today's price. Our screens read that as "no margin of safety": the stock is not a value candidate at this price, whatever the quality numbers say.
The 9 models disagree widely: GLS Growth gives 5.71 while DCF gives 181.48. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files DEO under Defensive: a low beta, a dividend and positive earnings.
Nine valuation models for DEO
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 181.48 | +93% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 9.33 | -90% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 107.61 | +15% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 41.61 | -56% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 5.71 | -94% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 146.99 | +56% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 103.94 | +11% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 29.58 | -69% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 35.06 | -63% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -29.99 | -132% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 99.00 | +5% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is average - DEO passes 6 of the nine Piotroski tests, which passes the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 4.1 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are moderate - ROIC 5.2%, ROE 15.9%, ROA 3.7% - with debt at 2.04 times equity and a free-cash-flow yield of 6.1%. Debt of 2.04 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is 2.14% at a payout ratio of 105%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Spirits 79%, Beer 16%, Ready To Drink 4% (fiscal year FY2025).
Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 1/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 5.2% |
|---|---|---|---|
| GLS Moat | 4.1 / 10 | ROE | 15.9% |
| Debt / equity | 2.04 | ROA | 3.7% |
| Free-cash-flow yield | 6.1% | Payout ratio | 105% |
| Institutions | 1 / 10 | Insiders · Congress | 5 · 1 / 10 |
Wheel Score 56: Fair
DEO scores 56 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 1/25, Health 13/20, Moat 6/15, Premium 17/20, Stability 18/20. Value (1/25) is where the points are missing.
Implied volatility is 32% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (17 of 20 points). Chain open interest is 26,800 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 881k shares a day on a market cap of $52.3B, with a beta of 0.31 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 18 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 1 / 25 | -28% margin of safety | |
| Health | 13 / 20 | Piotroski 6/9 | |
| Moat | 6 / 15 | moat 4.1/10 | |
| Premium | 17 / 20 | implied volatility 32% | |
| Stability | 18 / 20 | 881k shares/day, $52.3B cap, beta 0.31 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
No upcoming earnings date is recorded for DEO in the nightly calendar. The shares go ex-dividend on 16 Oct 2026 (1.20 per share), so a covered call sold before then carries a small early-assignment risk around that date.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Beverages - Alcoholic
The 8 companies below are the closest to Diageo plc by market cap within the Beverages - Alcoholic industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| ABEV Ambev S.A. | 3.26 | 9.31 | +65% | 91Prime | $50.7B |
| STZ Constellation Brands, Inc. | 127.43 | 253.32 | +50% | 87Prime | $21.8B |
| BUD Anheuser-Busch InBev SA/NV | 81.28 | 102.61 | +21% | 83Prime | $160.7B |
| TAP Molson Coors Beverage Company | 38.63 | 60.48 | +36% | 45Weak | $7.2B |
| CCU Compañía Cervecerías Unidas S.A. | 10.70 | 2,785.86 | +100% | 74Good | $2.0B |
| SAM The Boston Beer Company, Inc. | 178.14 | 406.72 | +56% | 45Weak | $1.8B |
| NFTN NFiniTi inc. | 6.00 | - | - | 27No options | $191M |
| IPST IP Strategy Holdings, Inc. | 2.34 | - | - | 24No options | $2M |
⚖ Compare DEO with 7 of them All Consumer Defensive stocks →
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about DEO
Is DEO undervalued right now?
No: at 93.96 the stock trades 28% above the GLS average fair value of 73.48 (data as of 16 Oct 2026). The margin of safety is negative.
What is the Wheel Score of DEO and what does it mean?
DEO scores 56 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for DEO?
73.48 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Diageo plc report earnings next?
No upcoming earnings date is recorded for DEO in our calendar as of 16 Oct 2026; the Calendars page is refreshed every morning.
Does DEO have listed options, and how liquid are they?
Yes. The nightly snapshot found 236 listed contracts with 26,800 open interest across all expiries and implied volatility of 32% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.