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Omnicom Hits 52-Week High on Inorganic Growth Momentum
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Shares of Omnicom Group Inc. (OMC - Free Report) scaled a new 52-week high of $86.50 during yesterday’s trading session, before closing a notch lower at $86.36 for a healthy year-to-date return of 14.1%. Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has the potential for further price rise. The stock is currently trading at a forward P/E of 18.1x and has long-term earnings growth expectation of 7.1%.
Growth Drivers
Omnicom is currently concentrating on strengthening its business and expanding its client base globally through acquisition of complementary companies. During the second quarter of 2016, the company acquired Rabin Martin, a global health strategy consulting firm. Rabin Martin’s high-profile client base will augment Omnicom Public Relation’s already strong healthcare offerings. Omnicom also acquired BioPharm Communications, a leading communications agency that serves 17 out of 25 major pharmaceutical companies across the globe. The acquisition will enable Omnicom to expand its leadership position in the highly competitive data-driven healthcare market. We expect the company to witness higher revenues in the imminent future on the back of such acquisitions.
Omnicom is also witnessing a healthy performance in developed markets like the U.S. and developing markets like Asia. The measures undertaken by the company to reduce costs have helped it to boost earnings. The company is expanding its global footprint and is moving into new service areas. It is also building upon its digital and analytical capabilities by investing in agencies and partnering with innovative technology companies in key markets. Omnicom’s operations are diversified across technology platforms, thus lowering its dependence on any one product in these dynamic technological markets. All these initiatives augur well for the long-term growth and stability of the company.
Omnicom has consistently distributed more than 100% of net income to shareholders through dividends and share repurchases. The company achieved a 45.3% return on equity for the twelve months ended Jun 30, 2016. All these offer a lucrative investment proposition for investors seeking to own blue-chip stocks that promise a healthy return on investment and have probably catapulted the stock to a fresh 52-week high.
Other Stocks to Consider
Other better-ranked stocks in the industry include The Hackett Group, Inc. (HCKT - Free Report) , CRA International Inc. (CRAI - Free Report) and CBIZ, Inc. (CBZ - Free Report) , each carrying a Zacks Rank #2 (Buy).
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Omnicom Hits 52-Week High on Inorganic Growth Momentum
Shares of Omnicom Group Inc. (OMC - Free Report) scaled a new 52-week high of $86.50 during yesterday’s trading session, before closing a notch lower at $86.36 for a healthy year-to-date return of 14.1%. Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has the potential for further price rise. The stock is currently trading at a forward P/E of 18.1x and has long-term earnings growth expectation of 7.1%.
Growth Drivers
Omnicom is currently concentrating on strengthening its business and expanding its client base globally through acquisition of complementary companies. During the second quarter of 2016, the company acquired Rabin Martin, a global health strategy consulting firm. Rabin Martin’s high-profile client base will augment Omnicom Public Relation’s already strong healthcare offerings. Omnicom also acquired BioPharm Communications, a leading communications agency that serves 17 out of 25 major pharmaceutical companies across the globe. The acquisition will enable Omnicom to expand its leadership position in the highly competitive data-driven healthcare market. We expect the company to witness higher revenues in the imminent future on the back of such acquisitions.
Omnicom is also witnessing a healthy performance in developed markets like the U.S. and developing markets like Asia. The measures undertaken by the company to reduce costs have helped it to boost earnings. The company is expanding its global footprint and is moving into new service areas. It is also building upon its digital and analytical capabilities by investing in agencies and partnering with innovative technology companies in key markets. Omnicom’s operations are diversified across technology platforms, thus lowering its dependence on any one product in these dynamic technological markets. All these initiatives augur well for the long-term growth and stability of the company.
OMNICOM GRP Price and Consensus
OMNICOM GRP Price and Consensus | OMNICOM GRP Quote
Omnicom has consistently distributed more than 100% of net income to shareholders through dividends and share repurchases. The company achieved a 45.3% return on equity for the twelve months ended Jun 30, 2016. All these offer a lucrative investment proposition for investors seeking to own blue-chip stocks that promise a healthy return on investment and have probably catapulted the stock to a fresh 52-week high.
Other Stocks to Consider
Other better-ranked stocks in the industry include The Hackett Group, Inc. (HCKT - Free Report) , CRA International Inc. (CRAI - Free Report) and CBIZ, Inc. (CBZ - Free Report) , each carrying a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>