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Here's Why You Should Retain Omnicom (OMC) in Your Portfolio

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Shares of Omnicom Group Inc. (OMC - Free Report) have gained 15% year to date, outperforming the 11.7% rally of the industry it belongs to.

With expected EPS growth rate of 4.7% and a market cap of $18.6 billion, it is a stock that investors should retain in their portfolio.

Factors That Bode Well

Prudent investments are expected to generate significant organic revenue growth for Omnicom going forward. The company is investing in real estate, back office services, procurement, IT, data, analytics and precision marketing.

Consistency and diversity of operations and increased focus on delivering consumer-centric strategic business solutions ensure persistent profitability for the company.

A consistent track record of dividend payment and share repurchase indicates the company’s commitment to create shareholders’ value and underline confidence in its business.

Consistent dividend payments and share repurchases indicate the company’s commitment to create shareholders’ value and underline its confidence in the business.

Omnicom paid dividends of $548.5 million, $515.2 million and $505.4 million and repurchased shares amounting to $ 581.3 million, $568.4 million and $602.2 million, respectively in 2018, 2017 and 2016.

Wrapping Up

Despite riding on significant growth prospects, Omnicom is not free from headwinds. Negative foreign exchange rate impact and weak acquisition revenues, net of disposition revenues have been weighing on the company’s top line for the past few quarters. Nevertheless, we believe that investments toward internal development and customer-centrism bode well for Omnicom in the long run.

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the broader Zacks Business Services sector are Broadridge (BR - Free Report) , Accenture (ACN - Free Report) and Automatic Data Processing (ADP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected EPS (three to five years) growth rate for Broadridge, Accenture and Automatic Data Processing is 10%, 10.3% and 13%, respectively.

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