OMNICOM GROUP (OMC) Stock Fundamental Analysis
NYSE:OMC - New York Stock Exchange, Inc. - US6819191064 - Common Stock - Currency: USD
OMC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 97 industry peers in the Media industry. While OMC belongs to the best of the industry regarding profitability, there are concerns on its financial health. OMC may be a bit undervalued, certainly considering the very reasonable score on growth OMC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year OMC was profitable.
In the past year OMC had a positive cash flow from operations.
OMC had positive earnings in each of the past 5 years.
OMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 5.16%, OMC belongs to the best of the industry, outperforming 80.41% of the companies in the same industry.
The Return On Equity of OMC (33.15%) is better than 94.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.76%, OMC belongs to the top of the industry, outperforming 93.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for OMC is significantly above the industry average of 7.56%.
| 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 has a better Profit Margin (9.21%) than 81.44% of its industry peers.
OMC's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 14.95%, OMC is doing good in the industry, outperforming 77.32% of the companies in the same industry.
OMC's Operating Margin has been stable in the last couple of years.
The Gross Margin of OMC (27.07%) is worse than 70.10% of its industry peers.
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.
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 1.78. This is a bad value and indicates that OMC is not financially healthy and even has some risk of bankruptcy.
OMC's Altman-Z score of 1.78 is fine compared to the rest of the industry. OMC outperforms 64.95% of its industry peers.
The Debt to FCF ratio of OMC is 4.33, which is a neutral value as it means it would take OMC, 4.33 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.33, OMC is in the better half of the industry, outperforming 77.32% of the companies in the same industry.
A Debt/Equity ratio of 1.40 is on the high side and indicates that OMC has dependencies on debt financing.
OMC's Debt to Equity ratio of 1.40 is on the low side compared to the rest of the industry. OMC is outperformed by 65.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 4.33 | ||
| Altman-Z | 1.78 |
ROIC/WACC1.86
WACC6.87%
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 67.01% of its industry peers.
A Quick Ratio of 0.94 indicates that OMC may have some problems paying its short term obligations.
OMC has a Quick ratio of 0.94. This is in the lower half of the industry: OMC underperforms 70.10% 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
The Earnings Per Share is expected to grow by 4.91% on average over the next years.
The Revenue is expected to grow by 2.27% on average over the next years.
EPS Next Y4.72%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
EPS Next 5Y4.91%
Revenue Next Year2.39%
Revenue Next 2Y2.75%
Revenue Next 3Y3.14%
Revenue Next 5Y2.27%
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
The Price/Earnings ratio is 9.27, which indicates a very decent valuation of OMC.
Compared to the rest of the industry, the Price/Earnings ratio of OMC indicates a rather cheap valuation: OMC is cheaper than 82.47% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.28, OMC is valued rather cheaply.
A Price/Forward Earnings ratio of 8.40 indicates a reasonable valuation of OMC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of OMC indicates a somewhat cheap valuation: OMC is cheaper than 79.38% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, OMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.27 | ||
| Fwd PE | 8.4 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OMC is valued a bit cheaper than the industry average as 75.26% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, OMC is valued cheaply inside the industry as 80.41% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.32 | ||
| EV/EBITDA | 6.6 |
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)1.96
PEG (5Y)1.58
EPS Next 2Y5.29%
EPS Next 3Y5.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.93%, OMC has a reasonable but not impressive dividend return.
OMC's Dividend Yield is rather good when compared to the industry average which is at 4.79. OMC pays more dividend than 85.57% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, OMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.93% |
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 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
OMC pays out 38.05% of its income as dividend. This is a sustainable payout ratio.
OMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.05%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
75.02
+1.19 (+1.61%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners107.7%
Inst Owner Change3.66%
Ins Owners1.16%
Ins Owner Change7.22%
Market Cap14.64B
Analysts75
Price Target100.77 (34.32%)
Short Float %14.09%
Short Ratio7.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.93% |
Yearly Dividend2.8
Dividend Growth(5Y)1.83%
DP38.05%
Div Incr Years0
Div Non Decr Years34
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)0%
PT rev (3m)-7.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.33%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.27 | ||
| Fwd PE | 8.4 | ||
| P/S | 0.93 | ||
| P/FCF | 10.32 | ||
| P/OCF | 9.35 | ||
| P/B | 3.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.6 |
EPS(TTM)8.09
EY10.78%
EPS(NY)8.93
Fwd EY11.91%
FCF(TTM)7.27
FCFY9.69%
OCF(TTM)8.02
OCFY10.69%
SpS80.72
BVpS22.41
TBVpS-35.47
PEG (NY)1.96
PEG (5Y)1.58
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
WACC6.87%
ROIC/WACC1.86
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 Y4.72%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
EPS Next 5Y4.91%
Revenue 1Y (TTM)5.84%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%1.65%
Revenue Next Year2.39%
Revenue Next 2Y2.75%
Revenue Next 3Y3.14%
Revenue Next 5Y2.27%
EBIT growth 1Y4.87%
EBIT growth 3Y3.01%
EBIT growth 5Y2.04%
EBIT Next Year12.67%
EBIT Next 3Y6.96%
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%