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Here's Why You Should Retain Omnicom (OMC) Stock for Now
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Omnicom Group Inc.’s (OMC - Free Report) stock has gained 15.6% year to date compared with the 13.5% growth of the industry it belongs.
The company has an expected long-term (three to five years) earnings per share growth rate of 8.4%. Its earnings for 2021 and 2022 are expected to grow 23.8% and 4.4% year over year, respectively.
Omnicom’s continues to focus on its internal development initiatives. To increase operational efficiency, the company has been making investments in real estate, back-office services, procurement and IT. It is also investing in data, analytics and precision marketing. Driven by such positives, we expect Omnicom to witness higher revenues on the back of organic growth.
Omnicom’s bottom line is in good shape as the company has been divesting underperforming and non-core businesses and reorganizing to meet clients’ ever-changing needs. We believe that consistency and diversity of Omnicom's operations and increased focus on delivering consumer-centric strategic business solutions, ensures long-term profitability for Omnicom.
Omnicom has a consistent record of returning value to shareholders in the form of dividend and share repurchases. It paid a respective $562.7 million, $564.3 million and $548.5 million in dividend in 2020, 2019 and 2018. The company repurchased shares worth $222 million, $610.2 and $581.3 million, respectively, in 2020, 2019 and 2018.
Debt Woe Stays
Omnicom’s cash and cash equivalent balance of $4.4 billion at the end of third-quarter 2021 was well below the total debt level $5.3 billion, underscoring that the company doesn’t have enough cash to meet its debt burden. The cash level, however, can meet the short-term debt of $10 million.
Avis Budgethas an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 499.7% in the past year. CAR has a long-term earnings growth of 18.8%. CAR sports a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 500% for the current year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 499.7% in the past year. CCRN has a long-term earnings growth of 21.5%. CCRN flaunts a Zacks #1 Rank.
CRA Internationalhas an expected earnings growth rate of around 61.2% for the current year. CRAI has a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 75.4% in the past year. CRAI has a long-term earnings growth of 15.5%. The stock carries a Zacks #2 (Buy) Rank.
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Here's Why You Should Retain Omnicom (OMC) Stock for Now
Omnicom Group Inc.’s (OMC - Free Report) stock has gained 15.6% year to date compared with the 13.5% growth of the industry it belongs.
The company has an expected long-term (three to five years) earnings per share growth rate of 8.4%. Its earnings for 2021 and 2022 are expected to grow 23.8% and 4.4% year over year, respectively.
Omnicom Group Inc. Price
Omnicom Group Inc. price | Omnicom Group Inc. Quote
What’s Supporting the Rally?
Omnicom’s continues to focus on its internal development initiatives. To increase operational efficiency, the company has been making investments in real estate, back-office services, procurement and IT. It is also investing in data, analytics and precision marketing. Driven by such positives, we expect Omnicom to witness higher revenues on the back of organic growth.
Omnicom’s bottom line is in good shape as the company has been divesting underperforming and non-core businesses and reorganizing to meet clients’ ever-changing needs. We believe that consistency and diversity of Omnicom's operations and increased focus on delivering consumer-centric strategic business solutions, ensures long-term profitability for Omnicom.
Omnicom has a consistent record of returning value to shareholders in the form of dividend and share repurchases. It paid a respective $562.7 million, $564.3 million and $548.5 million in dividend in 2020, 2019 and 2018. The company repurchased shares worth $222 million, $610.2 and $581.3 million, respectively, in 2020, 2019 and 2018.
Debt Woe Stays
Omnicom’s cash and cash equivalent balance of $4.4 billion at the end of third-quarter 2021 was well below the total debt level $5.3 billion, underscoring that the company doesn’t have enough cash to meet its debt burden. The cash level, however, can meet the short-term debt of $10 million.
Zacks Rank and Stocks to Consider
Omnicomcurrently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Cross Country Healthcare, Inc. (CCRN - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budgethas an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 499.7% in the past year. CAR has a long-term earnings growth of 18.8%. CAR sports a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 500% for the current year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 499.7% in the past year. CCRN has a long-term earnings growth of 21.5%. CCRN flaunts a Zacks #1 Rank.
CRA Internationalhas an expected earnings growth rate of around 61.2% for the current year. CRAI has a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 75.4% in the past year. CRAI has a long-term earnings growth of 15.5%. The stock carries a Zacks #2 (Buy) Rank.