OMNICOM GROUP (OMC) Stock Fundamental Analysis
NYSE:OMC - New York Stock Exchange, Inc. - US6819191064 - Common Stock - Currency: USD
Taking everything into account, OMC scores 5 out of 10 in our fundamental rating. OMC was compared to 97 industry peers in the Media industry. OMC has an excellent profitability rating, but there are concerns on its financial health. OMC is not valued too expensively and it also shows a decent growth rate. OMC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
OMC had positive earnings in the past year.
OMC had a positive operating cash flow in the past year.
In the past 5 years OMC has always been profitable.
Each year in the past 5 years OMC had a positive operating cash flow.
1.2 Ratios
OMC has a Return On Assets of 5.16%. This is amongst the best in the industry. OMC outperforms 81.44% of its industry peers.
OMC has a Return On Equity of 33.15%. This is amongst the best in the industry. OMC outperforms 94.85% of its industry peers.
The Return On Invested Capital of OMC (12.76%) is better than 94.85% of its industry peers.
The Average Return On Invested Capital over the past 3 years for OMC is significantly above the industry average of 7.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.16% | ||
| ROE | 33.15% | ||
| ROIC | 12.76% |
ROA(3y)4.95%
ROA(5y)4.64%
ROE(3y)38.09%
ROE(5y)37.59%
ROIC(3y)13.47%
ROIC(5y)12.82%
1.3 Margins
OMC's Profit Margin of 9.21% is amongst the best of the industry. OMC outperforms 83.51% of its industry peers.
OMC's Profit Margin has been stable in the last couple of years.
OMC's Operating Margin of 14.95% is fine compared to the rest of the industry. OMC outperforms 79.38% of its industry peers.
In the last couple of years the Operating Margin of OMC has remained more or less at the same level.
With a Gross Margin value of 27.07%, OMC is not doing good in the industry: 69.07% of the companies in the same industry are doing better.
OMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.95% | ||
| PM (TTM) | 9.21% | ||
| GM | 27.07% |
OM growth 3Y-0.15%
OM growth 5Y1.06%
PM growth 3Y-1.42%
PM growth 5Y1.06%
GM growth 3Y-0.09%
GM growth 5Y0.37%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), OMC is creating value.
The number of shares outstanding for OMC has been reduced compared to 1 year ago.
OMC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, OMC has a worse debt to assets ratio.
2.2 Solvency
OMC has an Altman-Z score of 1.78. This is a bad value and indicates that OMC is not financially healthy and even has some risk of bankruptcy.
OMC has a Altman-Z score of 1.78. This is in the better half of the industry: OMC outperforms 70.10% of its industry peers.
OMC has a debt to FCF ratio of 4.33. This is a neutral value as OMC would need 4.33 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 4.33, OMC is doing good in the industry, outperforming 78.35% of the companies in the same industry.
OMC has a Debt/Equity ratio of 1.40. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.40, OMC is doing worse than 60.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 4.33 | ||
| Altman-Z | 1.78 |
ROIC/WACC1.8
WACC7.1%
2.3 Liquidity
A Current Ratio of 1.01 indicates that OMC should not have too much problems paying its short term obligations.
The Current ratio of OMC (1.01) is worse than 68.04% of its industry peers.
A Quick Ratio of 0.94 indicates that OMC may have some problems paying its short term obligations.
OMC's Quick ratio of 0.94 is on the low side compared to the rest of the industry. OMC is outperformed by 69.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
OMC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.29%.
The Earnings Per Share has been growing slightly by 5.87% on average over the past years.
Looking at the last year, OMC shows a small growth in Revenue. The Revenue has grown by 5.84% in the last year.
OMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.96% yearly.
EPS 1Y (TTM)7.29%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%1.8%
Revenue 1Y (TTM)5.84%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%1.65%
3.2 Future
OMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.01% yearly.
Based on estimates for the next years, OMC will show a small growth in Revenue. The Revenue will grow by 2.37% on average per year.
EPS Next Y4.92%
EPS Next 2Y5.48%
EPS Next 3Y6.03%
EPS Next 5Y5.01%
Revenue Next Year2.72%
Revenue Next 2Y3.39%
Revenue Next 3Y3.57%
Revenue Next 5Y2.37%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 8.91, the valuation of OMC can be described as reasonable.
OMC's Price/Earnings ratio is a bit cheaper when compared to the industry. OMC is cheaper than 78.35% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.63. OMC is valued rather cheaply when compared to this.
OMC is valuated reasonably with a Price/Forward Earnings ratio of 8.04.
OMC's Price/Forward Earnings ratio is rather cheap when compared to the industry. OMC is cheaper than 86.60% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.85. OMC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.91 | ||
| Fwd PE | 8.04 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OMC is valued a bit cheaper than 70.10% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, OMC is valued a bit cheaper than 76.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.92 | ||
| EV/EBITDA | 6.56 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
OMC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)1.52
EPS Next 2Y5.48%
EPS Next 3Y6.03%
5. Dividend
5.1 Amount
OMC has a Yearly Dividend Yield of 3.82%.
OMC's Dividend Yield is rather good when compared to the industry average which is at 5.05. OMC pays more dividend than 83.51% of the companies in the same industry.
OMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.82% |
5.2 History
The dividend of OMC has a limited annual growth rate of 1.83%.
OMC has paid a dividend for at least 10 years, which is a reliable track record.
OMC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.83%
Div Incr Years0
Div Non Decr Years33
5.3 Sustainability
38.05% of the earnings are spent on dividend by OMC. This is a low number and sustainable payout ratio.
OMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.05%
EPS Next 2Y5.48%
EPS Next 3Y6.03%
72.09
-1.15 (-1.57%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners102.18%
Inst Owner Change0.15%
Ins Owners1.12%
Ins Owner Change2.38%
Market Cap14.07B
Analysts73.33
Price Target106.63 (47.91%)
Short Float %9.99%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.82% |
Yearly Dividend2.8
Dividend Growth(5Y)1.83%
DP38.05%
Div Incr Years0
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.43%
Min EPS beat(2)0.87%
Max EPS beat(2)3.99%
EPS beat(4)3
Avg EPS beat(4)1.16%
Min EPS beat(4)-0.42%
Max EPS beat(4)3.99%
EPS beat(8)5
Avg EPS beat(8)1.42%
EPS beat(12)9
Avg EPS beat(12)3.1%
EPS beat(16)13
Avg EPS beat(16)4.94%
Revenue beat(2)0
Avg Revenue beat(2)-1.14%
Min Revenue beat(2)-1.67%
Max Revenue beat(2)-0.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-1.67%
Max Revenue beat(4)1.27%
Revenue beat(8)2
Avg Revenue beat(8)-0.48%
Revenue beat(12)6
Avg Revenue beat(12)0.23%
Revenue beat(16)9
Avg Revenue beat(16)0.79%
PT rev (1m)-3.04%
PT rev (3m)-8.31%
EPS NQ rev (1m)-2.58%
EPS NQ rev (3m)-2.28%
EPS NY rev (1m)-1.13%
EPS NY rev (3m)-3.41%
Revenue NQ rev (1m)-0.42%
Revenue NQ rev (3m)-2.8%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)-2.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.91 | ||
| Fwd PE | 8.04 | ||
| P/S | 0.89 | ||
| P/FCF | 9.92 | ||
| P/OCF | 8.99 | ||
| P/B | 3.22 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.56 |
EPS(TTM)8.09
EY11.22%
EPS(NY)8.97
Fwd EY12.44%
FCF(TTM)7.27
FCFY10.08%
OCF(TTM)8.02
OCFY11.13%
SpS80.72
BVpS22.41
TBVpS-35.47
PEG (NY)1.81
PEG (5Y)1.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.16% | ||
| ROE | 33.15% | ||
| ROCE | 17.35% | ||
| ROIC | 12.76% | ||
| ROICexc | 16.99% | ||
| ROICexgc | N/A | ||
| OM | 14.95% | ||
| PM (TTM) | 9.21% | ||
| GM | 27.07% | ||
| FCFM | 9.01% |
ROA(3y)4.95%
ROA(5y)4.64%
ROE(3y)38.09%
ROE(5y)37.59%
ROIC(3y)13.47%
ROIC(5y)12.82%
ROICexc(3y)20.9%
ROICexc(5y)21.13%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)18.31%
ROCE(5y)17.43%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-5.78%
ROICexc growth 5Y-4.39%
OM growth 3Y-0.15%
OM growth 5Y1.06%
PM growth 3Y-1.42%
PM growth 5Y1.06%
GM growth 3Y-0.09%
GM growth 5Y0.37%
F-Score6
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 4.33 | ||
| Debt/EBITDA | 2.36 | ||
| Cap/Depr | 60.97% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 12.97 | ||
| Cash Conversion | 60.3% | ||
| Profit Quality | 97.83% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.78 |
F-Score6
WACC7.1%
ROIC/WACC1.8
Cap/Depr(3y)43.65%
Cap/Depr(5y)95.75%
Cap/Sales(3y)0.66%
Cap/Sales(5y)1.44%
Profit Quality(3y)89.53%
Profit Quality(5y)106.8%
High Growth Momentum
Growth
EPS 1Y (TTM)7.29%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%1.8%
EPS Next Y4.92%
EPS Next 2Y5.48%
EPS Next 3Y6.03%
EPS Next 5Y5.01%
Revenue 1Y (TTM)5.84%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%1.65%
Revenue Next Year2.72%
Revenue Next 2Y3.39%
Revenue Next 3Y3.57%
Revenue Next 5Y2.37%
EBIT growth 1Y4.87%
EBIT growth 3Y3.01%
EBIT growth 5Y2.04%
EBIT Next Year15.52%
EBIT Next 3Y8%
EBIT Next 5Y6.32%
FCF growth 1Y62.86%
FCF growth 3Y7.57%
FCF growth 5Y-1.91%
OCF growth 1Y64.95%
OCF growth 3Y-3.77%
OCF growth 5Y-1.36%