Did Diageo cut the dividend in 2024?
UK liquor company paid less in pence just before becoming a Dividend Aristocrat
Europe is nothing compared to the United States when it comes to real Dividend Aristocrats, that much is true. Another company cutting its annual payment seems to be Diageo PLC.
Diageo is the United Kingdom-based international manufacturer and distributor of premium drinks with brands including Johnnie Walker, Crown Royal, J&B and Buchanan's whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio and Tanqueray. The company was known for its annual dividend hikes with 24 years of increases last year. That track record has now ended.
This October Diageo paid a 47.23 pence final dividend, following a 32.05 pence interim dividend paid in April of 2024. In 2023 these dividends were 30.83 pence and 49.17 pence per share. This means that the FY 2024 dividend is down 0.9% from 2023, if we take the GBP declared dividends. Please note that we did NOT look at the USD dividends; on the Diageo website the full dividend history is shown in pence. Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc has changed from sterling to US dollars which is applied prospectively. This will most likely explain the dividend cut this year.
So see for yourself. The stupid thing is that Diageo had raised its dividend 24 consecutive years, almost reaching Dividend Aristocrat status. That is not going to happen if we take the GBP dividend as leading, like we should do and have done for decades updating our dividend hike database.
Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc has changed from sterling to US dollars which is applied prospectively. This probably explains the lower pence dividend for 2024. Anyway, a cut is a cut…..
At a current stock price of 2356 pence the dividend yield for Diageo is 3.4%. The stock performance has been dramatic the last years. In 2024 the stock is down 17% trading near its multi year lows.
Dividend growth has never been that good at Diageo; in the past 20 years they never announced a double digit dividend hike with a 20 year CAGR of just 5.4%. That is just not enough, especially for a company with a relative low dividend yield like Diageo.
DIAGEO ANNUAL DIVIDEND CHANGE (as declared in pence)
2024: -0.9%
2023: +5.0%
2022: +5.0%
2021: +3.8%
2020: +1.9%
2019: +5.0%
Other companies from Europe giving up on their dividend track records in the last couple of years include LVMH and L’Oréal. LVMH cut its dividend during the pandemic and L’Oréal did not increase the dividend, ending a decades long streak of annual increases.
Based on our proprietary statistics there are currently less than 25 ‘real’ Dividend Aristocrats in Europe, with 25+ years of consecutive years of increases. This includes well known Aristocrats such as Nestlé, Roche, Sanofi and Novo Nordisk.
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.