OMNICOM GROUP (OMC) Stock Fundamental Analysis
NYSE:OMC - New York Stock Exchange, Inc. - US6819191064 - Common Stock
OMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 92 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 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
OMC had positive earnings in the past year.
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 Return On Assets of 5.06%. This is amongst the best in the industry. OMC outperforms 85.06% of its industry peers.
With an excellent Return On Equity value of 36.91%, OMC belongs to the best of the industry, outperforming 95.40% of the companies in the same industry.
OMC's Return On Invested Capital of 12.49% is amongst the best of the industry. OMC outperforms 93.10% of its industry peers.
The Average Return On Invested Capital over the past 3 years for OMC is significantly above the industry average of 6.90%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 36.91% | ||
| ROIC | 12.49% |
ROA(3y)4.93%
ROA(5y)4.64%
ROE(3y)40.67%
ROE(5y)39.91%
ROIC(3y)13.31%
ROIC(5y)12.97%
1.3 Margins
The Profit Margin of OMC (9.45%) is better than 82.76% of its industry peers.
OMC's Profit Margin has improved in the last couple of years.
The Operating Margin of OMC (14.96%) is better than 81.61% of its industry peers.
In the last couple of years the Operating Margin of OMC has grown nicely.
The Gross Margin of OMC (27.13%) is worse than 71.26% 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 | 14.96% | ||
| PM (TTM) | 9.45% | ||
| GM | 27.13% |
OM growth 3Y4.17%
OM growth 5Y3.5%
PM growth 3Y9.69%
PM growth 5Y1.78%
GM growth 3Y0.81%
GM growth 5Y0.84%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so OMC is still creating some value.
The number of shares outstanding for OMC has been reduced compared to 1 year ago.
The number of shares outstanding for OMC has been reduced compared to 5 years ago.
OMC has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.74, we must say that OMC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of OMC (1.74) is better than 67.82% of its industry peers.
OMC has a debt to FCF ratio of 4.63. This is a neutral value as OMC would need 4.63 years to pay back of all of its debts.
OMC has a better Debt to FCF ratio (4.63) than 75.86% of its industry peers.
A Debt/Equity ratio of 1.57 is on the high side and indicates that OMC has dependencies on debt financing.
The Debt to Equity ratio of OMC (1.57) is worse than 65.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 4.63 | ||
| Altman-Z | 1.74 |
ROIC/WACC1.67
WACC7.48%
2.3 Liquidity
OMC has a Current Ratio of 0.98. This is a bad value and indicates that OMC is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.98, OMC is doing worse than 74.71% of the companies in the same industry.
OMC has a Quick Ratio of 0.98. This is a bad value and indicates that OMC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of OMC (0.93) is worse than 77.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
OMC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.24%.
Measured over the past 5 years, OMC shows a small growth in Earnings Per Share. The EPS has been growing by 5.26% on average per year.
Looking at the last year, OMC shows a small growth in Revenue. The Revenue has grown by 6.40% in the last year.
Measured over the past years, OMC shows a decrease in Revenue. The Revenue has been decreasing by -0.79% on average per year.
EPS 1Y (TTM)7.24%
EPS 3Y12.42%
EPS 5Y5.26%
EPS Q2Q%9.14%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y3.71%
Revenue growth 5Y-0.79%
Sales Q2Q%8.51%
3.2 Future
The Earnings Per Share is expected to grow by 6.46% on average over the next years.
The Revenue is expected to grow by 3.40% on average over the next years.
EPS Next Y8.64%
EPS Next 2Y8.55%
EPS Next 3Y8.19%
EPS Next 5Y6.46%
Revenue Next Year7.43%
Revenue Next 2Y6.04%
Revenue Next 3Y5.44%
Revenue Next 5Y3.4%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 11.03, the valuation of OMC can be described as reasonable.
77.01% of the companies in the same industry are more expensive than OMC, based on the Price/Earnings ratio.
OMC is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
OMC is valuated reasonably with a Price/Forward Earnings ratio of 9.89.
79.31% of the companies in the same industry are more expensive than OMC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, OMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.03 | ||
| Fwd PE | 9.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OMC is valued a bit cheaper than 62.07% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, OMC is valued a bit cheaper than the industry average as 71.26% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.33 | ||
| EV/EBITDA | 7.93 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of OMC may justify a higher PE ratio.
PEG (NY)1.28
PEG (5Y)2.1
EPS Next 2Y8.55%
EPS Next 3Y8.19%
5. Dividend
5.1 Amount
OMC has a Yearly Dividend Yield of 3.26%.
Compared to an average industry Dividend Yield of 4.46, OMC pays a better dividend. On top of this OMC pays more dividend than 81.61% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, OMC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
The dividend of OMC has a limited annual growth rate of 3.05%.
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)3.05%
Div Incr Years0
Div Non Decr Years33
5.3 Sustainability
38.04% 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.
DP38.04%
EPS Next 2Y8.55%
EPS Next 3Y8.19%
OMNICOM GROUP
NYSE:OMC (1/21/2025, 8:18:34 PM)
After market: 86.9177 +0.33 (+0.38%)86.59
+1.21 (+1.42%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners100.75%
Inst Owner Change-0.13%
Ins Owners1.13%
Ins Owner Change-0.38%
Market Cap17.01B
Analysts80
Price Target116.3 (34.31%)
Short Float %7.22%
Short Ratio6.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Yearly Dividend2.81
Dividend Growth(5Y)3.05%
DP38.04%
Div Incr Years0
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.11%
Min EPS beat(2)-0.42%
Max EPS beat(2)0.2%
EPS beat(4)3
Avg EPS beat(4)1.75%
Min EPS beat(4)-0.42%
Max EPS beat(4)6.39%
EPS beat(8)5
Avg EPS beat(8)2.78%
EPS beat(12)9
Avg EPS beat(12)4.09%
EPS beat(16)13
Avg EPS beat(16)6.54%
Revenue beat(2)1
Avg Revenue beat(2)0.59%
Min Revenue beat(2)-0.08%
Max Revenue beat(2)1.27%
Revenue beat(4)2
Avg Revenue beat(4)0.35%
Min Revenue beat(4)-0.59%
Max Revenue beat(4)1.27%
Revenue beat(8)4
Avg Revenue beat(8)0.21%
Revenue beat(12)8
Avg Revenue beat(12)0.96%
Revenue beat(16)11
Avg Revenue beat(16)1.26%
PT rev (1m)-0.51%
PT rev (3m)4.33%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.25%
EPS NY rev (1m)0%
EPS NY rev (3m)0.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.03 | ||
| Fwd PE | 9.89 | ||
| P/S | 1.1 | ||
| P/FCF | 11.33 | ||
| P/OCF | 10.57 | ||
| P/B | 4.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.93 |
EPS(TTM)7.85
EY9.07%
EPS(NY)8.76
Fwd EY10.11%
FCF(TTM)7.65
FCFY8.83%
OCF(TTM)8.19
OCFY9.46%
SpS78.55
BVpS20.12
TBVpS-38.27
PEG (NY)1.28
PEG (5Y)2.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 36.91% | ||
| ROCE | 17.19% | ||
| ROIC | 12.49% | ||
| ROICexc | 16.95% | ||
| ROICexgc | N/A | ||
| OM | 14.96% | ||
| PM (TTM) | 9.45% | ||
| GM | 27.13% | ||
| FCFM | 9.73% |
ROA(3y)4.93%
ROA(5y)4.64%
ROE(3y)40.67%
ROE(5y)39.91%
ROIC(3y)13.31%
ROIC(5y)12.97%
ROICexc(3y)21.89%
ROICexc(5y)21.83%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)18.3%
ROCE(5y)17.83%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y3.7%
ROICexc growth 5Y-2.5%
OM growth 3Y4.17%
OM growth 5Y3.5%
PM growth 3Y9.69%
PM growth 5Y1.78%
GM growth 3Y0.81%
GM growth 5Y0.84%
F-Score6
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 4.63 | ||
| Debt/EBITDA | 2.44 | ||
| Cap/Depr | 45.85% | ||
| Cap/Sales | 0.7% | ||
| Interest Coverage | 15.38 | ||
| Cash Conversion | 63.28% | ||
| Profit Quality | 102.98% | ||
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 1.74 |
F-Score6
WACC7.48%
ROIC/WACC1.67
Cap/Depr(3y)128.9%
Cap/Depr(5y)92.94%
Cap/Sales(3y)1.91%
Cap/Sales(5y)1.4%
Profit Quality(3y)83.96%
Profit Quality(5y)111.48%
High Growth Momentum
Growth
EPS 1Y (TTM)7.24%
EPS 3Y12.42%
EPS 5Y5.26%
EPS Q2Q%9.14%
EPS Next Y8.64%
EPS Next 2Y8.55%
EPS Next 3Y8.19%
EPS Next 5Y6.46%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y3.71%
Revenue growth 5Y-0.79%
Sales Q2Q%8.51%
Revenue Next Year7.43%
Revenue Next 2Y6.04%
Revenue Next 3Y5.44%
Revenue Next 5Y3.4%
EBIT growth 1Y4.29%
EBIT growth 3Y8.04%
EBIT growth 5Y2.67%
EBIT Next Year17.45%
EBIT Next 3Y9.04%
EBIT Next 5Y8.49%
FCF growth 1Y95.69%
FCF growth 3Y-6.61%
FCF growth 5Y-2.52%
OCF growth 1Y10.53%
OCF growth 3Y-6.23%
OCF growth 5Y-3.76%