OMNICOM GROUP (OMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:OMC - US6819191064 - Common Stock
76.54 USD
-1.49 (-1.91%)
76.54 USD
0 (0%)
Taking everything into account, OMC scores 6 out of 10 in our fundamental rating. OMC was compared to 92 industry peers in the Media industry. OMC has an excellent profitability rating, but there are some minor concerns on its financial health. OMC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. OMC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year OMC was profitable.
- OMC had a positive operating cash flow in the past year.
- Each year in the past 5 years OMC has been profitable.
- Each year in the past 5 years OMC had a positive operating cash flow.
1.2 Ratios
- OMC has a better Return On Assets (4.63%) than 80.43% of its industry peers.
- Looking at the Return On Equity, with a value of 28.93%, OMC belongs to the top of the industry, outperforming 96.74% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 14.29%, OMC belongs to the best of the industry, outperforming 95.65% of the companies in the same industry.
- OMC had an Average Return On Invested Capital over the past 3 years of 13.47%. This is significantly above the industry average of 7.07%.
- The 3 year average ROIC (13.47%) for OMC is below the current ROIC(14.29%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.63% | ||
| ROE | 28.93% | ||
| ROIC | 14.29% |
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 has a better Profit Margin (8.31%) than 80.43% of its industry peers.
- In the last couple of years the Profit Margin of OMC has remained more or less at the same level.
- OMC has a Operating Margin of 15.00%. This is amongst the best in the industry. OMC outperforms 82.61% of its industry peers.
- OMC's Operating Margin has been stable in the last couple of years.
- OMC has a Gross Margin of 26.90%. This is in the lower half of the industry: OMC underperforms 68.48% of its industry peers.
- In the last couple of years the Gross Margin of OMC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15% | ||
| PM (TTM) | 8.31% | ||
| GM | 26.9% |
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
- OMC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- OMC has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for OMC has been reduced compared to 5 years ago.
- The debt/assets ratio for OMC is higher compared to a year ago.
2.2 Solvency
- OMC has an Altman-Z score of 1.96. This is not the best score and indicates that OMC is in the grey zone with still only limited risk for bankruptcy at the moment.
- OMC has a better Altman-Z score (1.96) than 70.65% of its industry peers.
- The Debt to FCF ratio of OMC is 3.78, which is a good value as it means it would take OMC, 3.78 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of OMC (3.78) is better than 79.35% of its industry peers.
- A Debt/Equity ratio of 1.06 is on the high side and indicates that OMC has dependencies on debt financing.
- OMC has a Debt to Equity ratio (1.06) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 3.78 | ||
| Altman-Z | 1.96 |
ROIC/WACC1.9
WACC7.54%
2.3 Liquidity
- A Current Ratio of 0.92 indicates that OMC may have some problems paying its short term obligations.
- OMC's Current ratio of 0.92 is on the low side compared to the rest of the industry. OMC is outperformed by 61.96% of its industry peers.
- OMC has a Quick Ratio of 0.92. This is a bad value and indicates that OMC is not financially healthy enough and could expect problems in meeting its short term obligations.
- OMC's Quick ratio of 0.87 is on the low side compared to the rest of the industry. OMC is outperformed by 63.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
- OMC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.01%.
- Measured over the past 5 years, OMC shows a small growth in Earnings Per Share. The EPS has been growing by 5.87% on average per year.
- The Revenue has been growing slightly by 4.13% in the past year.
- The Revenue has been growing slightly by 0.96% on average over the past years.
EPS 1Y (TTM)7.01%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%10.34%
Revenue 1Y (TTM)4.13%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%3.98%
3.2 Future
- Based on estimates for the next years, OMC will show a small growth in Earnings Per Share. The EPS will grow by 5.40% on average per year.
- Based on estimates for the next years, OMC will show a quite strong growth in Revenue. The Revenue will grow by 13.31% on average per year.
EPS Next Y5.96%
EPS Next 2Y11.28%
EPS Next 3Y12.84%
EPS Next 5Y5.4%
Revenue Next Year3.62%
Revenue Next 2Y20.47%
Revenue Next 3Y15.61%
Revenue Next 5Y13.31%
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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 9.11, which indicates a very decent valuation of OMC.
- OMC's Price/Earnings ratio is rather cheap when compared to the industry. OMC is cheaper than 83.70% of the companies in the same industry.
- When comparing the Price/Earnings ratio of OMC to the average of the S&P500 Index (28.60), we can say OMC is valued rather cheaply.
- The Price/Forward Earnings ratio is 7.67, which indicates a rather cheap valuation of OMC.
- Based on the Price/Forward Earnings ratio, OMC is valued a bit cheaper than 76.09% of the companies in the same industry.
- OMC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.11 | ||
| Fwd PE | 7.67 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of OMC indicates a somewhat cheap valuation: OMC is cheaper than 63.04% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, OMC is valued a bit cheaper than the industry average as 65.22% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.56 | ||
| EV/EBITDA | 10.25 |
4.3 Compensation for Growth
- OMC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- OMC has an outstanding profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as OMC's earnings are expected to grow with 12.84% in the coming years.
PEG (NY)1.53
PEG (5Y)1.55
EPS Next 2Y11.28%
EPS Next 3Y12.84%
5. Dividend
5.1 Amount
- OMC has a Yearly Dividend Yield of 4.04%, which is a nice return.
- OMC's Dividend Yield is rather good when compared to the industry average which is at 1.22. OMC pays more dividend than 88.04% of the companies in the same industry.
- OMC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.04% |
5.2 History
- The dividend of OMC has a limited annual growth rate of 1.83%.
- OMC has been paying a dividend for at least 10 years, so it has a reliable track record.
- OMC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.83%
Div Incr Years0
Div Non Decr Years34
5.3 Sustainability
- 41.26% of the earnings are spent on dividend by OMC. This is a bit on the high side, but may be sustainable.
- OMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.26%
EPS Next 2Y11.28%
EPS Next 3Y12.84%
OMNICOM GROUP / OMC FAQ
What is the ChartMill fundamental rating of OMNICOM GROUP (OMC) stock?
ChartMill assigns a fundamental rating of 6 / 10 to OMC.
What is the valuation status of OMNICOM GROUP (OMC) stock?
ChartMill assigns a valuation rating of 7 / 10 to OMNICOM GROUP (OMC). This can be considered as Undervalued.
Can you provide the profitability details for OMNICOM GROUP?
OMNICOM GROUP (OMC) has a profitability rating of 8 / 10.
How financially healthy is OMNICOM GROUP?
The financial health rating of OMNICOM GROUP (OMC) is 4 / 10.
What is the earnings growth outlook for OMNICOM GROUP?
The Earnings per Share (EPS) of OMNICOM GROUP (OMC) is expected to grow by 5.96% in the next year.