Diageo plc
DEODiageo plc (DEO) is a Consumer Defensive company that currently yields 3.85% — trading near fair value based on 10 years of dividend yield history. The Weiss valuation model places the undervaluation threshold at $81.95 and the overvaluation threshold at $143.01. Diageo plc holds a quality score of 28/100 (Risky), reflecting 3 consecutive years of dividend growth with a 96% payout ratio. The 5-year dividend CAGR stands at 2.6%.
DEO Dividend Yield History — Weiss Valuation
Distance to undervalued
Waiting for a better entry
Needs about 4.9% downside to reach the Weiss buy zone
Undervaluation starts near $81.95, where the annual dividend would imply roughly 4.05% yield. That is 0.20% above today's yield.
Buy-zone price
$81.95
Target yield
4.05%
Research checklist
What to clear before buying the yield
Updated May 25, 2026
Dividend durability
3YVerify the dividend record before treating yield as durable.
Earnings payout
96%Coverage deserves a closer look in filings.
Cash payout
193%Confirm cash conversion and one-off effects.
Dividend growth
2.6%Lower growth changes the return trade-off.
What changed
What changed since the last update
2026-05-23 → 2026-05-25
No major change in signal, yield, price, quality, or payout since the last update.
Why Now?
Diageo plc is trading at a fair valuation relative to its dividend history.
Current yield 3.9% vs historical max 4.2% (91% of maximum).
3 years of uninterrupted dividends.
Elevated payout ratio of 96%.
What matters now
Read the signal before the headline yield
Valuation is neutral here: quality has to do more of the work than entry price.
The 28/100 quality score says the headline yield needs extra skepticism.
Free cash flow payout is above 100%, so cash coverage is the first risk to unpack.
DEO Dividend Income Projection — DRIP Compounder
Dividend Compounder (DRIP)
Year 1 Income
$395
Year 10 Income
$733
Yield on Cost
7.7%
Total Income
$5,455
Assumes dividends reinvested at current price. Simplified model — for illustrative purposes only.
More research
Full price history & technical analysis
TradingView ↗Fundamentals, valuation & analyst ratings
FinViz ↗Moat rating & analyst fair value
Morningstar ↗DEO Dividend Quality Score
Quality Score
Risky
Key Metrics
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In-depth analysis
→ DEO Dividend Analysis Article