Diageo's (LSE:DGE) 43-year record of paying dividends survives, but the amount paid has been reset dramatically under chief executive Sir Dave Lewis. The headline trailing Yield still reflects payments from before the change, which makes it a misleading guide for anyone assessing the income on offer today. The figures here come from a data snapshot dated 7 October 2026, and a first-quarter update was listed for today.

Two yields, one reset

The snapshot shows an annual Dividend of 37.6p per share and a latest payment of 22.7p. Year-on-year dividend growth is minus 53.0%, a cut of more than half. Most telling is the gap between the two yield measures. The trailing 12-month yield is 4.0%, while the indicated yield is just 2.4%.

The trailing figure looks backward and still captures larger payments made before the rebasing. The indicated figure is closer to what the current run-rate implies, and is therefore the more relevant one following the cut. The continuous growth streak has fallen to zero, while the 43 years of continuous payout remain intact. The record of never skipping a payment has lasted, in other words, but the record of raising it has not.

The trailing Payout Ratio of 64.5% implies cover of about 1.55 times. It sits above the new policy range described below, which is what you might expect while the measure still reflects old, higher payments. It should be expected to shift as the lower dividend works through the data.

What changed, and why

The cut was announced with interim results in February. The Interim Dividend was halved to 20 US cents from 40.5 cents, and the board moved to a policy of paying out 30% to 50% of earnings, compared with about 63% the year before. It set a minimum annual dividend of 50 cents, against the 103 cents paid the previous year. Net Debt of $21.7bn at the end of December was a central reason, with the rebasing intended to bring more financial flexibility and create room for investment. The shares fell by about 7% on one account of the day, and other reports recorded steeper falls.

Diageo reports in dollars, so the sterling figures in the snapshot depend on exchange rates. The 50-cent full-year dividend proposed in August implies a final payment of 30 cents, and a financial calendar lists an ex-dividend date of 15 October.

Results and the reset strategy

Preliminary results on 6 August, for the year to 30 June 2026, showed net sales of $19.6bn, down 3.0%, with organic net sales down 2.0%. Reported operating profit fell 27.2% to $3.16bn, while adjusted operating profit rose 2.0%.

The strength was concentrated in Europe, Latin America and the Caribbean, and Africa, with Guinness, Smirnoff ready-to-drink and Johnnie Walker singled out. Weakness centred on North America and Asia Pacific. A revised operating framework includes change-programme costs of about $0.8bn. Savings are expected to begin coming through this financial year.

What to watch

Diageo's (LSE:DGE) calendar listed a first-quarter sales release and the Annual General Meeting for today, 5 November. It is the next test of whether North America and Asia Pacific are stabilising.

Beyond that, the essential numbers are net debt and the progress of cost savings. The 50-cent floor gives holders a stated minimum, so the question is how soon Earnings growth could lift the dividend above it within the 30% to 50% range. Any revival of the growth streak would have to begin from this lower base, which makes the indicated yield the better starting point.