Diageo Plc

Diageo (DEO) is a stock I bought in the the financial crisis in the at around $59. Therefore I have done OK. Its is now in the mid-90's. DEO pays a dividend on 2.7%. According to morningstar its a wide-moat stock with a fair value of $79.00 so currently it is somewhat over valued.

The company has very high return on equity (33.3%) and relatively high debt to equity (1.4). However because of very strong cash flow it is easily able carry the high debt load. The company has negative tangible book value.

DEO is trading above its median ten year p/e. p/b and p/s ratios.

DEO medpe,medps,medpb Interactive Chart

The DCF tool also suggests that DEO has still more to go esp. as emerging market growth continues and DEO has a strong presence in these markets.

Therefore my conclusion is the DEO should move over $100 to become over valued.