We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Interpublic (IPG) Should be in Your Portfolio
Read MoreHide Full Article
A prudent investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
The Interpublic Group of Companies, Inc. (IPG - Free Report) is a marketing and advertising services provider that has performed extremely well lately and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Interpublic an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past six months. Shares of Interpublic have returned a massive 26.9%, which compares favorably with the industry’s gain of 7.1%.
Solid Zacks Rank: Interpublic currently carries a Zacks Rank #2 (Buy). Stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 30 days, the Zacks Consensus Estimate for Interpublic’s current-quarter earnings increased 13.5% to 42 cents per share. Estimates for 2018 increased 2.9% to $1.75 per share. For 2019, earnings have moved up 2.2% to $1.86 per share.
Strong Growth Prospects: The current Zacks Consensus Estimate for 2018 earnings indicates year-over-year growth of 24.1%. Moreover, earnings are expected to register 6.6% growth in 2019. The stock has long-term expected earnings per share growth rate of 6.7%.
Growth Factors
Strong Business Model
Interpublic’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters based on diversification across emerging regions and collaboration/integration across agencies through technological improvement. Moreover, the company continues to look for strategic investments/acquisitions to expand in high-growth regions and key world markets.
Further, Interpublic looks strong on the back of higher organic revenue growth. In 2017, organic revenue growth of 1.8% was aided by growth across its major geographic regions, which was primarily a result of growth with existing clients. In the United States, organic growth was driven by its media and advertising disciplines. Internationally, organic increase can be attributed to strong growth within its media discipline, with remarkable contributions from Continental Europe and Other region, primarily Canada. In the first quarter, organic growth in the United States was 4.3% and 2.6% in international markets.
Notably, in first-quarter 2018, organic growth resulted in a 3.6% increase in net revenues. It marked an improvement from 3.3% organic growth in fourth-quarter 2017. Further, the company expects organic growth to positively impact revenues by 2-3% in 2018.
Encouraging Balance Sheet
Interpublic has a strong balance sheet driven by the management’s prudent moves. Interpublic generated cash, cash equivalents and marketable securities of $791 million in 2017. The company generated $881.8 million of cash from operating activities in 2017 compared with $512.8 million in 2016 and $688.5 million in 2015. The significant amount of cash provides it the flexibility to pursue any growth strategy. The company’s strong cash flow generating abilities make it a value buy for investors.
Shareholder-Friendly Moves
We are impressed by Interpublic’s consistent efforts to return value to shareholders in the form of dividend and share repurchases. Interpublic paid dividends of $280.3 million, $238.4 million and $195.5 million,, respectively in 2017, 2016 and 2015. The company repurchased shares amounting to $300.1 million, $303.3 million and $285.2 million, in 2017, 2016 and 2015, respectively.
On Feb 14, 2018, the company’s board of directors announced a 17% dividend hike, raising the quarterly cash dividend to 21 cents per share. The company also approved another $300 million share repurchase plan, while using $55 million to repurchase 2.4 million shares in the first quarter of 2018. The company still has 400 million left on its outstanding repurchase authorization.
Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business. These shareholder-friendly initiatives not only instill investors’ confidence but also positively impact earnings per share.
Other Stocks to Consider
Some other top-ranked stocks in the broader Business Services sector include The Dun & Bradstreet Corporation (DNB - Free Report) , Automatic Data Processing (ADP - Free Report) , and Broadridge Financial Solutions Inc. (BR - Free Report) . All the stocks carry a Zacks Rank #2.
The long-term expected earnings per share growth rates for Dun & Bradstreet, Automatic Data Processing and Broadridge are 4.5%, 11% and 10%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Here's Why Interpublic (IPG) Should be in Your Portfolio
A prudent investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
The Interpublic Group of Companies, Inc. (IPG - Free Report) is a marketing and advertising services provider that has performed extremely well lately and has the potential to sustain the momentum in the near term. Consequently, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Interpublic an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse in the past six months. Shares of Interpublic have returned a massive 26.9%, which compares favorably with the industry’s gain of 7.1%.
Solid Zacks Rank: Interpublic currently carries a Zacks Rank #2 (Buy). Stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 30 days, the Zacks Consensus Estimate for Interpublic’s current-quarter earnings increased 13.5% to 42 cents per share. Estimates for 2018 increased 2.9% to $1.75 per share. For 2019, earnings have moved up 2.2% to $1.86 per share.
Strong Growth Prospects: The current Zacks Consensus Estimate for 2018 earnings indicates year-over-year growth of 24.1%. Moreover, earnings are expected to register 6.6% growth in 2019. The stock has long-term expected earnings per share growth rate of 6.7%.
Growth Factors
Strong Business Model
Interpublic’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters based on diversification across emerging regions and collaboration/integration across agencies through technological improvement. Moreover, the company continues to look for strategic investments/acquisitions to expand in high-growth regions and key world markets.
Further, Interpublic looks strong on the back of higher organic revenue growth. In 2017, organic revenue growth of 1.8% was aided by growth across its major geographic regions, which was primarily a result of growth with existing clients. In the United States, organic growth was driven by its media and advertising disciplines. Internationally, organic increase can be attributed to strong growth within its media discipline, with remarkable contributions from Continental Europe and Other region, primarily Canada. In the first quarter, organic growth in the United States was 4.3% and 2.6% in international markets.
Notably, in first-quarter 2018, organic growth resulted in a 3.6% increase in net revenues. It marked an improvement from 3.3% organic growth in fourth-quarter 2017. Further, the company expects organic growth to positively impact revenues by 2-3% in 2018.
Encouraging Balance Sheet
Interpublic has a strong balance sheet driven by the management’s prudent moves. Interpublic generated cash, cash equivalents and marketable securities of $791 million in 2017. The company generated $881.8 million of cash from operating activities in 2017 compared with $512.8 million in 2016 and $688.5 million in 2015. The significant amount of cash provides it the flexibility to pursue any growth strategy. The company’s strong cash flow generating abilities make it a value buy for investors.
Shareholder-Friendly Moves
We are impressed by Interpublic’s consistent efforts to return value to shareholders in the form of dividend and share repurchases. Interpublic paid dividends of $280.3 million, $238.4 million and $195.5 million,, respectively in 2017, 2016 and 2015. The company repurchased shares amounting to $300.1 million, $303.3 million and $285.2 million, in 2017, 2016 and 2015, respectively.
On Feb 14, 2018, the company’s board of directors announced a 17% dividend hike, raising the quarterly cash dividend to 21 cents per share. The company also approved another $300 million share repurchase plan, while using $55 million to repurchase 2.4 million shares in the first quarter of 2018. The company still has 400 million left on its outstanding repurchase authorization.
Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in its business. These shareholder-friendly initiatives not only instill investors’ confidence but also positively impact earnings per share.
Other Stocks to Consider
Some other top-ranked stocks in the broader Business Services sector include The Dun & Bradstreet Corporation (DNB - Free Report) , Automatic Data Processing (ADP - Free Report) , and Broadridge Financial Solutions Inc. (BR - Free Report) . All the stocks carry a Zacks Rank #2.
The long-term expected earnings per share growth rates for Dun & Bradstreet, Automatic Data Processing and Broadridge are 4.5%, 11% and 10%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>