Quick verdict: DEO vs KR in 2026

Overall, Diageo plc (DEO) presents a stronger financial profile and significantly higher implied upside potential compared to The Kroger Co. (KR) for 2026. While KR shows a slight edge in revenue growth and analyst consensus, DEO leads decisively in valuation and profitability. DEO also offers the most substantial projected upside from both analyst targets and discounted cash flow models. Not investment advice.

DEO vs KR: key metrics side by side

Full side-by-side comparison of DEO and KR across valuation, profitability, growth and analyst sentiment. Data updated 2026-05-07.

DEO vs KR valuation comparison

When evaluating the DEO vs KR valuation, Diageo plc (DEO) appears to be significantly more attractively priced as of 2026-05-07. DEO trades at a P/E ratio of 19.09x, which is considerably lower than The Kroger Co.’s (KR) P/E of 40.8x. This suggests that investors are paying less for each dollar of DEO’s earnings compared to KR. Similarly, DEO’s Price-to-Book (P/B) ratio stands at 3.99x, again much lower than KR’s 6.99x, indicating better value on an asset basis.

Beyond traditional multiples, the Discounted Cash Flow (DCF) models indicate a stark difference in implied upside. DEO’s DCF model suggests a potential upside of an impressive +476.5%, pointing to a substantial undervaluation based on its intrinsic worth. In contrast, KR’s DCF upside is projected at +72.7%. While still a notable potential return, it pales in comparison to DEO’s figure. Based on these fundamental valuation metrics, DEO clearly presents a more compelling investment opportunity for value-oriented investors seeking discounted assets.

DEO vs KR growth comparison

In terms of growth, the comparison between DEO and KR reveals modest activity in both consumer defensive giants. The Kroger Co. (KR) currently holds a slight edge with a year-over-year revenue growth of 0.4%. This indicates a marginal expansion in its vast retail operations, with KR reporting $147.64 billion in TTM revenue. Conversely, Diageo plc (DEO) reported a revenue growth of -0.1%, signifying a slight contraction in its top line. While KR’s growth is minimal, it demonstrates positive momentum compared to DEO’s slight decline.

Given the maturity of both companies and their respective industries (packaged goods and grocery retail), high growth rates are generally not expected. KR’s ability to achieve positive, albeit small, revenue growth suggests it might be navigating current market conditions more effectively or benefiting from its larger scale and diversified grocery offerings. DEO’s negative growth rate, even if slight, might warrant closer scrutiny into its operational challenges or specific market segment performance that could be hindering expansion. Investors focused on even modest top-line expansion might find KR’s trajectory more favorable at this juncture.

DEO vs KR profitability

The profitability comparison between DEO and KR shows a significant advantage for Diageo plc. DEO boasts a robust net margin of 12.18%, indicating its strong ability to convert revenue into profit after all expenses. This is substantially higher than The Kroger Co.’s (KR) net margin of 0.69%, a typical characteristic of the highly competitive, low-margin grocery retail sector. DEO’s premium product portfolio in beverages allows for much healthier profit margins compared to KR’s high-volume, thin-margin business model.

Further reinforcing DEO’s superior operational efficiency is its EBITDA margin of 26.26%, which dwarfs KR’s 5.79%. This demonstrates DEO’s strength in generating earnings before interest, taxes, depreciation, and amortization. Regarding Free Cash Flow (FCF) yield, KR takes the lead with an 8.46% yield, considerably higher than DEO’s 3.51%. This suggests that despite its low net margins, KR is more efficient at generating cash relative to its market capitalization, which can be attractive for investors seeking strong cash generation. Both companies have an N/A% for Return on Equity (ROE) in the provided data.

Analyst ratings: DEO vs KR

When examining analyst sentiment, The Kroger Co. (KR) appears to be slightly more favored by the analyst community compared to Diageo plc (DEO). Out of 44 analysts covering KR, 47.7% have issued a ‘Buy’ rating, leading to a consensus of ‘Buy’. For DEO, with 35 analysts, 42.9% recommend ‘Buy’, resulting in a ‘Hold’ consensus. This indicates that a greater proportion of analysts currently see KR as a purchase opportunity, reflecting confidence in its near-term prospects.

Despite KR receiving a higher percentage of ‘Buy’ ratings and a ‘Buy’ consensus, DEO’s potential price target upside is significantly more compelling. The average analyst target for DEO is $124, representing an impressive +48.7% upside from its current price of $83.37. In contrast, KR’s average target of $74.75 offers a more modest +13.4% upside from its current price of $65.91. This suggests that while more analysts are bullish on KR, those covering DEO see a much larger potential for capital appreciation, indicating that DEO might be perceived as more undervalued by those who cover it.

Should I buy DEO or KR stock in 2026?

For investors prioritizing growth, The Kroger Co. (KR) might present a marginally more appealing option in the `deo vs kr stock comparison 2026`. With a revenue growth of 0.4% year-over-year, KR shows slight positive momentum compared to DEO’s -0.1%. However, it’s crucial to note that neither company exhibits high growth characteristics typical of more dynamic sectors. Both operate in the Consumer Defensive sector, generally known for stability rather than rapid expansion. Growth-focused investors should consider if these modest rates align with their overall portfolio objectives.

When considering `deo vs kr fundamentals and valuation`, DEO stands out as the more attractive choice for value investors. Its P/E ratio of 19.09x is significantly lower than KR’s 40.8x, suggesting DEO is trading at a much more reasonable multiple of its earnings. Furthermore, DEO’s Price-to-Book ratio of 3.99x is also better than KR’s 6.99x. The most compelling argument for DEO on a valuation basis is its massive DCF upside of +476.5%, indicating a profound potential for price appreciation based on intrinsic value, far surpassing KR’s +72.7%.

For investors focused on income, the choice between `should i buy deo or kr stock 2026` based on dividends leans towards DEO. Diageo plc offers a dividend yield of 0.04%, which, while modest, is double that of The Kroger Co.’s 0.02%. It’s important to set expectations that neither company offers a substantial dividend yield, especially for income-dependent portfolios. Investors seeking significant passive income might need to explore other investment avenues. This is not investment advice; always conduct thorough personal research.

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