Omnicom Group Inc. (OMC - Free Report) stock has had an impressive run on the bourse over the past year. Shares have returned 16.8% against 4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has rallied 3.3%.
With an expected long-term earnings per share growth rate of 5.1% and a market cap of $17.1 billion, Omnicom seems to be a stock that investors should retain in their portfolio for now.
What’s Aiding the Company?
Consistency and diversity of operations and increased focus on delivering consumer-centric strategic business solutions ensure persistent profitability for Omnicom.
Omnicom Group Inc. EPS Diluted (TTM)
The company remains focused on internal development and operating efficiency initiatives. Its investments in real estate, back office services, procurement, IT, data, analytics and precision marketing are driving operating performance.
Consistent dividend payments and share repurchases indicate Omnicom’s commitment to create shareholders’ value and underline its confidence in the business. The company paid out $280.4 million through dividends and repurchased shares worth $527.6 million in the first six months of 2019.
It paid out 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.
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).
Some better-ranked stocks in the broader Zacks Business Services sector are Fiserv (FISV - Free Report) , Huron Consulting (HURN - Free Report) and Charles River Associates (CRAI - Free Report) . While Fiserv and Huron sport a Zacks Rank #1 (Strong Buy), Charles River carries a Zacks Rank #2 (Buy).
Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated at 13.5%, 13% and 12%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
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