The Zacks advertising and marketing industry is currently in good shape. The upside was backed by the advertising revenue trend in the United States. Per Statista, advertising revenues increased from $194.7 billion in 2014 to $343.5 billion in 2022, delivering a constant growth except 2020 when the industry took a hit due to the pandemic.

We believe this is the appropriate time to invest in a booming market and pick regular dividend-paying stocks. Dividends create a reliable source of return without selling shares.

Industry and its trends

Per Statista, advertising revenues are expected to reach $424.3 billion by 2027. Internet advertising has been gradually replacing traditional TV advertising, contributing nearly 63% to advertisement revenues in 2022. The metric is expected to be 68% by 2027. Online advertising revenues has seen a surge in the past five years, growing 130% to nearly $210 billion in 2022. The inclusion of artificial intelligence is adding to growth of online advertising. Paid search, podcasts and videos are some of the main avenues of digital ad spend.

In the past year,theadvertising and marketing industry has rallied 24.2% compared with the S&P 500 composites’ 14.6% increase and the Business Services sector’s 3.6% rise.

Why Dividend paying stock

In case of market volatility, dividend stocks can be a go to option for investors. With the volatility currently involved in U.S. markets, investing in fundamentally strong stocks with a good track record of dividend payment seems to be the best idea. Dividend-paying companies are likely to recover faster after a major correction in the market compared with its non-dividend-paying peers.

Stock Picks

Stocks from the expanding advertising and marketing industry that pay regular dividends and exhibit fundamental strength include Interpublic Group (IPG Quick QuoteIPG - Free Report) and Omnicom Group (OMC Quick QuoteOMC - Free Report) . They belong to the broader Business Services sector and currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

To select dividend paying stocks, we ran the Zacks Stocks Screener to identify the abovementioned stocks with a dividend yield in excess of 2% and a five-year historical dividend growth of more than 0.1%. These stocks have a dividend payout ratio of less than 60%.

The Zacks Consensus Estimate for Interpublic Group’s 2023 earnings is pegged at $2.96, indicating a 7.6% year-over-year growth. The consensus mark has been revised 2.1% upward in the past 60 days. Revenues are expected at $9.74 billion, indicating a 3.1% increase from the year-ago quarter’s figure. It has a payout ratio of 47%. The company’s annualized dividend comes at $1.24, currently yielding 3.2%. It has an annualized five-year dividend growth of 8%. Interpublic currently has a value score of A, reflecting on the history of delivering superior returns. Its earnings topped the Zacks Consensus Estimate in three of the four preceding quarters and matched on one instance. The average surprise came at 9.5%.

The Zacks Consensus Estimate for Omnicom’s 2023 earnings is pegged at $7.43. The figure indicates growth of 7.2%. The consensus mark for earnings has been revised 1.1% northward in the past 60 days. The consensus mark for revenue indicates a 3% growth. Omnicom has a five-year annualized dividend growth rate of 3.5%. Its annualized dividend of $2.80, currently yielding 2.9% with a payout ratio of 39%. Omnicom currently has a value score of A. It has beaten the Zacks Consensus Estimate for earnings in all the last four quarters, with an earnings surprise of 9.1% on average.