Switch to:
Diageo PLC  (NYSE:DEO) Earnings Yield (Joel Greenblatt) %: 6.18% (As of Jun. 2017)

Diageo PLC's Enterprise Value for the quarter that ended in Jun. 2017 was $87,750 Mil. Diageo PLC's EBIT for the trailing twelve months (TTM) ended in Jun. 2017 was $5,279 Mil. Diageo PLC's Earnings Yield (Joel Greenblatt) for the quarter that ended in Jun. 2017 was 6.18%.

NYSE:DEO' s Earnings Yield (Joel Greenblatt) % Range Over the Past 10 Years
Min: 5   Max: 9.9
Current: 5.49

5
9.9

During the past 13 years, the highest Earnings Yield (Joel Greenblatt) of Diageo PLC was 9.90%. The lowest was 5.00%. And the median was 6.80%.

NYSE:DEO's Earnings Yield (Joel Greenblatt) % is ranked higher than
61% of the 220 Companies
in the Global industry.

( Industry Median: 4.79 vs. NYSE:DEO: 5.49 )

Joel Greenblatt's definition of earnings yield has the same problems the regular earnings yield does. It does not consider the growth of the company. It only looks at one-year's business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.

A better indicator of the attractiveness of an investment which takes growth into account is the Forward Rate of Return (Yacktman) %. Diageo PLC's Forward Rate of Return (Yacktman) % for the quarter that ended in Jun. 2017 was 3.99%. The Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Diageo PLC Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
Earnings Yield (Joel Greenblatt) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.08 5.97 6.30 5.46 6.18

Diageo PLC Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
Earnings Yield (Joel Greenblatt) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.30 0.00 5.46 0.00 6.18

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

In his book, The Little That Beat the Market, hedge fund manager Joel Greenblatt defines Earnings Yield as operating income divided by enterprise value.

Diageo PLCs Earnings Yield (Joel Greenblatt) for the fiscal year that ended in Jun. 2017 is calculated as

Earnings Yield (Joel Greenblatt)=EBIT/Enterprise Value
=5279.12932138/87749.5617351
=6.02 %

Diageo PLC's Earnings Yield (Joel Greenblatt) for the quarter that ended in Jun. 2017 is calculated as

Earnings Yield (Joel Greenblatt)=EBIT (TTM)/Enterprise Value
=5279.12932138/87,750
=6.02 %

For company reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data. Diageo PLC's EBIT for the trailing twelve months (TTM) ended in Jun. 2017 was $5,279 Mil.



Explanation

Joel Greenblatt defines the earnings yield using the above equation because it more accurately reflects the company's profitability relative to its stock price. Items like interest payment and tax etc. are not directly related to the company's operational profitability.

Enterprise Value instead of market cap (share price) is used in the calculation because it is the real price stock and bond investors together pay for the company.


Be Aware

Joel Greenblatt’s definition of earnings yield has the same problems the regular earnings yield does. It does not consider the growth of the company. It only looks at one-year’s business operation. For cyclical companies, the earnings yield is usually highest at the peak of the business cycle. But these earnings are rarely sustainable.

Forward Rate of Return (Yacktman) % based on Don Yacktman's definition is a better measure of the expected rate of return for a stock.


Related Terms


Headlines

From the Internet

DEO
27 Stock Portfolio

- Seekingalpha 2017-11-20 11:42:14

DEO
Tracking Tweedy Browne Portfolio Q3 2017 Update

- Seekingalpha 2017-11-20 02:23:21

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK