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Interpublic's (IPG) Rapid Investment in Technology Bodes Well

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Interpublic (IPG - Free Report) gains edge from digital prowess, workforce diversity, and global reach. Acquisitions foster market adaptation and portfolio expansion. Its solid cash position meets debt needs. Dividends and buybacks enhance earnings per share  and build investor trust.

In the past year, IPG gained 13.2% compared with its industry’s 2.9% growth.

Interpublic Group of Companies, Inc. (The) Price

 

Interpublic Group of Companies, Inc. (The) Price

Interpublic Group of Companies, Inc. (The) price | Interpublic Group of Companies, Inc. (The) Quote

 

Factors That Augur Well

Interpublic's growing varied employee base provides it with a significant competitive advantage. It remains dedicated to drawing in, procuring, and nurturing skilled individuals from diverse backgrounds with strategic, creative, and digital talents. This commitment aims to boost organic growth and fortify its presence in global markets.

Interpublic remains dedicated to technology investments and the global expansion of its digital specialist agencies to align with the ever-evolving media landscape. It has been strengthening its digital capabilities, encompassing search, social media, user experience, content creation, analytics, and mobile, throughout its portfolio, to sustain growth in this dynamic sector.

Interpublic adheres to a methodical acquisition strategy, which prioritizes high-growth areas and regions. It has been actively acquiring and investing in companies worldwide to broaden its product offerings and adapt to the rapidly changing landscape of marketing services and media opportunities. Over recent years, Interpublic has acquired agencies spanning various marketing domains, including data, technology, e-commerce, healthcare communication, and full-service agencies. Notably, the company completed one acquisition in 2022, four in 2020, one in 2019, and five in 2018.

Interpublic's unwavering commitment to delivering value to shareholders positions its stock as a dependable choice for long-term wealth accumulation. In 2022, 2021, and 2020, Interpublic distributed dividends amounting to $457.3 million, $427.7 million, and $398.1 million, respectively.

Threats to Interpublic

Interpublic’s current ratio at the end of second-quarter 2023 was pegged at 1.03, lower than the current ratio of 1.04 reported at the end of the prior-year quarter. This indicates that the company may have problem meeting its short-term obligations.

With operations spanning 100+ countries, Interpublic faces currency exchange risks due to its global presence. Roughly 35% of its revenues come from non-U.S. operations, involving currencies like the Australian Dollar, Brazilian Real, British Pound Sterling, Canadian Dollar, Chinese Yuan Renminbi, Euro, and Indian Rupee.

Zacks Rank and Stocks to Consider

IPG currently carries a Zacks Rank #3 (Hold).

Investors interested in Zacks Business Services sector can consider the following stocks:

Aptisv (APTV - Free Report) holds a Zacks Rank #2(Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 Earnings for 2023 are expected to grow 39% while revenues are anticipated to gain 14.8% from the year-ago figure. APTV has an impressive earnings surprise of 13.35% in the past four quarters, having beaten the Zacks Consensus Estimate in all four trailing quarters. APTV carries a VGM Score of A.

Clean Harbors (CLH - Free Report) holds a Zacks Rank of 2. Earnings for 2023 are expected to be in-line with the year-ago quarter while revenues are anticipated go up 5.3% year over year. CLH has an impressive earnings surprise of 13% in the past four quarters, having beaten the Zacks Consensus Estimate in all four trailing quarters. CLH carries a VGM Score of B.

Verisk Analytics (VRSK - Free Report) holds a Zacks Rank of 2. Earnings for 2023 are expected to grow 14% while revenues are anticipated to fall 8.3% from the year-ago figure. VRSK has an impressive earnings surprise of 9.85% in the past four quarters, having beaten the Zacks Consensus Estimate in three of the four trailing quarters and matching on one instance.

 

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