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Reasons to Retain Omnicom (OMC) Stock in Your Portfolio Now
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Omnicom Group (OMC - Free Report) stock has gained 23.6%, outperforming 9.9% and 19.1% growth of the industry it belongs to and the Zacks S&P 500 Composite in the past six months, respectively.
OMC has an impressive Growth Score of B. This style score condenses all essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. It has an expected long-term (three to five years) EPS growth rate of 5.4%. The company’s earnings for 2024 and 2025 are anticipated to grow 4.3% and 7% year over year, respectively. Revenues are expected to increase 5.4% in 2024 and 4.5% in 2025.
Factors That Auger Well
Omnicom’s strategy entails growth through acquisitions. It acquired Coffee & TV and Flywheel Digital in 2024. Acquiring Coffee & TV assisted in leveraging the scale of production operations, and launching a suite of global content and production services under a single unit, Omnicom Content Studios. Flywheel Digital seamlessly integrates offerings across retail and brand media, digital and in-store commerce and precision marketing.
The company has a consistent record of returning value to shareholders in the forms of dividends and share repurchases. It has paid out dividends of $562.7 million, $581.1 million and $592.3 million and repurchased shares worth $570.8 million, $611.4 million and $527.3 million in 2023, 2022 and 2021, respectively. Such strategies not only boost investors’ confidence but also impact the bottom line positively.
Omnicom's presence in various segments of the advertising and marketing industry not only diversifies its revenue streams but also equips it with the flexibility and expertise needed to navigate the dynamic market effectively. About 53% of the total revenues of the company was derived from the Advertising & Media segment in 2023. Partly due to these positives, shares of Omnicom have gained 23.6% in the past six months.
Some Risks
In 2023, the company derived approximately 49% of its revenues from international operations. It maintains a strong presence in the key international markets, including the Eurozone, the U.K., Australia, Brazil, Canada, China and Japan, conducting business transactions in more than 50 different currencies besides the U.S. dollar. This global reach implies that fluctuations in foreign exchange rates will pose a threat to the bottom line. In 2023, OMC recorded $14 million in foreign currency transaction losses.
OMC's current ratio (a measure of liquidity) at the end of the fourth quarter of 2023 was pegged at 0.95, lower than the year-ago quarter's 0.97. A current ratio of less than 1 indicates that the company may have problems paying off its short-term obligations.
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Reasons to Retain Omnicom (OMC) Stock in Your Portfolio Now
Omnicom Group (OMC - Free Report) stock has gained 23.6%, outperforming 9.9% and 19.1% growth of the industry it belongs to and the Zacks S&P 500 Composite in the past six months, respectively.
OMC has an impressive Growth Score of B. This style score condenses all essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. It has an expected long-term (three to five years) EPS growth rate of 5.4%. The company’s earnings for 2024 and 2025 are anticipated to grow 4.3% and 7% year over year, respectively. Revenues are expected to increase 5.4% in 2024 and 4.5% in 2025.
Factors That Auger Well
Omnicom’s strategy entails growth through acquisitions. It acquired Coffee & TV and Flywheel Digital in 2024. Acquiring Coffee & TV assisted in leveraging the scale of production operations, and launching a suite of global content and production services under a single unit, Omnicom Content Studios. Flywheel Digital seamlessly integrates offerings across retail and brand media, digital and in-store commerce and precision marketing.
Omnicom Group Inc. Revenue (TTM)
Omnicom Group Inc. revenue-ttm | Omnicom Group Inc. Quote
The company has a consistent record of returning value to shareholders in the forms of dividends and share repurchases. It has paid out dividends of $562.7 million, $581.1 million and $592.3 million and repurchased shares worth $570.8 million, $611.4 million and $527.3 million in 2023, 2022 and 2021, respectively. Such strategies not only boost investors’ confidence but also impact the bottom line positively.
Omnicom's presence in various segments of the advertising and marketing industry not only diversifies its revenue streams but also equips it with the flexibility and expertise needed to navigate the dynamic market effectively. About 53% of the total revenues of the company was derived from the Advertising & Media segment in 2023. Partly due to these positives, shares of Omnicom have gained 23.6% in the past six months.
Some Risks
In 2023, the company derived approximately 49% of its revenues from international operations. It maintains a strong presence in the key international markets, including the Eurozone, the U.K., Australia, Brazil, Canada, China and Japan, conducting business transactions in more than 50 different currencies besides the U.S. dollar. This global reach implies that fluctuations in foreign exchange rates will pose a threat to the bottom line. In 2023, OMC recorded $14 million in foreign currency transaction losses.
OMC's current ratio (a measure of liquidity) at the end of the fourth quarter of 2023 was pegged at 0.95, lower than the year-ago quarter's 0.97. A current ratio of less than 1 indicates that the company may have problems paying off its short-term obligations.
Zacks Rank and Stocks to Consider
Omnicom currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the broader Zacks Business Services sector are APi Group (APG - Free Report) and Cellebrite DI Ltd. (CLBT - Free Report) .
APi Group currently sports a Zacks Rank of 1 (Strong Buy). It has a long-term earnings growth expectation of 17.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
APG delivered a trailing four-quarter earnings surprise of 5.1%, on average.
Cellebrite presently carries a Zacks Rank of 2 (Buy). It has a long-term earnings growth expectation of 18%.
CLBT delivered a trailing four-quarter earnings surprise of 237.5%, on average.