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Here's Why You Should Retain Interpublic (IPG) Stock for Now
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The Interpublic Group of Companies, Inc. (IPG - Free Report) currently benefits from solid shareholder-friendly measures among other factors. Meanwhile, seasonality in business is a headwind.
IPG has an expected long-term earnings per share (three to five years) growth rate of 4.4%. Further, earnings are anticipated to register growth of 4.2% and 4.4% in 2022 and 2023, respectively.
Factors That Augur Well
Commitment to shareholder returns makes the Interpublic stock a reliable investment to compound wealth over the long term. In 2021 and 2020, Interpublic paid out $427.7 million and $398.1 million in dividends, respectively. In 2019 and 2018, IPG paid out $363.1 million and $322.1 million in dividend payments. Such moves indicate IPG’s commitment to create value for shareholders and underline its confidence in its business. Interpublic’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.04, higher than the current ratio 0.97 reported at the end of the prior-year quarter. Increasing current ratio indicates that IPG has no problem meeting its short-term obligations.
Interpublic’s increasingly diverse workforce gives it a key competitive edge. IPG continues to attract, acquire and develop strategic, creative and digital talent from diverse backgrounds with a view to increase organic growth and strengthen its foothold in the international markets.
A Risk
Interpublic’s cash position is affected by seasonality in business. This is because of clients’ fluctuating annual media spending budgets and changing media spending patterns, which vary throughout the year with different localities. Seasonality is observed in the first nine months of a year, with its biggest impact in the first quarter.
In the past year, shares of IPG have declined 16.9% compared with the industry’s fall of 40.3%.
Image: Shutterstock
Here's Why You Should Retain Interpublic (IPG) Stock for Now
The Interpublic Group of Companies, Inc. (IPG - Free Report) currently benefits from solid shareholder-friendly measures among other factors. Meanwhile, seasonality in business is a headwind.
IPG has an expected long-term earnings per share (three to five years) growth rate of 4.4%. Further, earnings are anticipated to register growth of 4.2% and 4.4% in 2022 and 2023, respectively.
Factors That Augur Well
Commitment to shareholder returns makes the Interpublic stock a reliable investment to compound wealth over the long term. In 2021 and 2020, Interpublic paid out $427.7 million and $398.1 million in dividends, respectively. In 2019 and 2018, IPG paid out $363.1 million and $322.1 million in dividend payments. Such moves indicate IPG’s commitment to create value for shareholders and underline its confidence in its business.
Interpublic’s current ratio (a measure of liquidity) at the end of first-quarter 2022 was pegged at 1.04, higher than the current ratio 0.97 reported at the end of the prior-year quarter. Increasing current ratio indicates that IPG has no problem meeting its short-term obligations.
Interpublic’s increasingly diverse workforce gives it a key competitive edge. IPG continues to attract, acquire and develop strategic, creative and digital talent from diverse backgrounds with a view to increase organic growth and strengthen its foothold in the international markets.
A Risk
Interpublic’s cash position is affected by seasonality in business. This is because of clients’ fluctuating annual media spending budgets and changing media spending patterns, which vary throughout the year with different localities. Seasonality is observed in the first nine months of a year, with its biggest impact in the first quarter.
In the past year, shares of IPG have declined 16.9% compared with the industry’s fall of 40.3%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Interpublic currently 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 Group, Inc. (CAR - Free Report) , Cross Country Healthcare (CCRN - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.
Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.
Cross Country Healthcare sports a Zacks Rank of 1 at present. CCRN has a long-term earnings growth expectation of 6.9%.
Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.
CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.