Diageo plc (DEO) Dividends

DEO Price Forecast Based on Dividend Discount Model

For dividend yielding stocks, the Dividend Discount Model (DDM) is a common valuation tool; it attempts to extrapolate a fair share price based primarily on the dividend the stock provides relative to a number of other quantiative aspects of its business. Regarding Diageo Plc, the dividend discount model StockNews created for the company implies a positive return of 7.39%. Digging deeper, the aspects of Diageo Plc's dividend discount model that we found most interesting were:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Consumer Defensive sector, Diageo Plc's expected return of 7.39% is higher than 27.38% of its fellow sector mates.
• Out of all stocks in our universe of US-listed dividend-issuing stocks, DEO has a discount rate lower than 27.38% of them (a lower discount rate is associated with lower risk).
• Beta, which compares volatilty of an individual stock to that of the S&P 500, is lower for Diageo Plc than it is for just 25% of other dividend issuers in the Consumer Defensive sector.
• Based on dividend growth rate, DEO boasts a higher growth rate in terms of its annual cash distributed to its owners than 30.82% of the dividend issuers in our set.

DEO Dividends vs. Peers