OMNICOM GROUP (OMC) Stock Fundamental Analysis
NYSE:OMC - New York Stock Exchange, Inc. - US6819191064 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to OMC. OMC was compared to 93 industry peers in the Media industry. OMC has an excellent profitability rating, but there are concerns on its financial health. OMC is valued quite cheap, while showing a decent growth score. This is a good combination! Finally OMC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
OMC had positive earnings in the past year.
In the past year OMC had a positive cash flow from operations.
OMC had positive earnings in each of the past 5 years.
Each year in the past 5 years OMC had a positive operating cash flow.
1.2 Ratios
OMC has a Return On Assets of 5.00%. This is amongst the best in the industry. OMC outperforms 85.06% of its industry peers.
OMC has a Return On Equity of 35.31%. This is amongst the best in the industry. OMC outperforms 95.40% of its industry peers.
OMC's Return On Invested Capital of 12.96% is amongst the best of the industry. OMC outperforms 94.25% of its industry peers.
OMC had an Average Return On Invested Capital over the past 3 years of 13.47%. This is significantly above the industry average of 7.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5% | ||
| ROE | 35.31% | ||
| ROIC | 12.96% |
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
With an excellent Profit Margin value of 9.44%, OMC belongs to the best of the industry, outperforming 82.76% of the companies in the same industry.
OMC's Profit Margin has been stable in the last couple of years.
OMC has a better Operating Margin (14.96%) than 81.61% 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 27.13%, OMC is not doing good in the industry: 72.41% 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 | 14.96% | ||
| PM (TTM) | 9.44% | ||
| GM | 27.13% |
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.
Compared to 1 year ago, OMC has less shares outstanding
Compared to 5 years ago, OMC has less shares outstanding
Compared to 1 year ago, OMC has a worse debt to assets ratio.
2.2 Solvency
OMC has an Altman-Z score of 1.72. This is a bad value and indicates that OMC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of OMC (1.72) is better than 66.67% of its industry peers.
The Debt to FCF ratio of OMC is 3.80, which is a good value as it means it would take OMC, 3.80 years of fcf income to pay off all of its debts.
OMC's Debt to FCF ratio of 3.80 is fine compared to the rest of the industry. OMC outperforms 79.31% of its industry peers.
OMC has a Debt/Equity ratio of 1.44. This is a high value indicating a heavy dependency on external financing.
OMC has a Debt to Equity ratio of 1.44. This is in the lower half of the industry: OMC underperforms 64.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 3.8 | ||
| Altman-Z | 1.72 |
ROIC/WACC1.78
WACC7.27%
2.3 Liquidity
OMC has a Current Ratio of 1.00. This is a bad value and indicates that OMC is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 1.00, OMC is not doing good in the industry: 74.71% of the companies in the same industry are doing better.
A Quick Ratio of 0.94 indicates that OMC may have some problems paying its short term obligations.
OMC has a worse Quick ratio (0.94) than 74.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.48% over the past year.
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.
OMC shows a small growth in Revenue. In the last year, the Revenue has grown by 6.79%.
The Revenue has been growing slightly by 0.96% on average over the past years.
EPS 1Y (TTM)8.48%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%9.55%
Revenue 1Y (TTM)6.79%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%6.43%
3.2 Future
The Earnings Per Share is expected to grow by 5.76% on average over the next years.
OMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.06% yearly.
EPS Next Y6.15%
EPS Next 2Y7.12%
EPS Next 3Y7.68%
EPS Next 5Y5.76%
Revenue Next Year3.72%
Revenue Next 2Y3.9%
Revenue Next 3Y3.57%
Revenue Next 5Y3.06%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
OMC is valuated reasonably with a Price/Earnings ratio of 10.21.
Based on the Price/Earnings ratio, OMC is valued a bit cheaper than the industry average as 77.01% of the companies are valued more expensively.
OMC is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.62, which indicates a very decent valuation of OMC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of OMC indicates a rather cheap valuation: OMC is cheaper than 80.46% of the companies listed 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 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 9.62 |
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 71.26% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, OMC is valued a bit cheaper than 72.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.15 | ||
| EV/EBITDA | 7 |
4.3 Compensation for Growth
The 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.
PEG (NY)1.66
PEG (5Y)1.74
EPS Next 2Y7.12%
EPS Next 3Y7.68%
5. Dividend
5.1 Amount
OMC has a Yearly Dividend Yield of 3.35%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.48, OMC pays a bit more dividend than its industry peers.
OMC's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
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 Years33
5.3 Sustainability
OMC pays out 37.33% 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.
DP37.33%
EPS Next 2Y7.12%
EPS Next 3Y7.68%
82.3
-1.3 (-1.56%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners102.18%
Inst Owner Change5.77%
Ins Owners1.12%
Ins Owner Change0.12%
Market Cap16.17B
Analysts76.25
Price Target110.49 (34.25%)
Short Float %8.07%
Short Ratio6.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
Yearly Dividend2.8
Dividend Growth(5Y)1.83%
DP37.33%
Div Incr Years0
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.23%
Min EPS beat(2)-0.42%
Max EPS beat(2)0.87%
EPS beat(4)3
Avg EPS beat(4)1.76%
Min EPS beat(4)-0.42%
Max EPS beat(4)6.39%
EPS beat(8)5
Avg EPS beat(8)2.36%
EPS beat(12)9
Avg EPS beat(12)3.2%
EPS beat(16)13
Avg EPS beat(16)5.71%
Revenue beat(2)1
Avg Revenue beat(2)0.33%
Min Revenue beat(2)-0.62%
Max Revenue beat(2)1.27%
Revenue beat(4)1
Avg Revenue beat(4)-0.01%
Min Revenue beat(4)-0.62%
Max Revenue beat(4)1.27%
Revenue beat(8)3
Avg Revenue beat(8)-0.15%
Revenue beat(12)7
Avg Revenue beat(12)0.6%
Revenue beat(16)10
Avg Revenue beat(16)1.16%
PT rev (1m)-4.73%
PT rev (3m)-5.22%
EPS NQ rev (1m)-4.06%
EPS NQ rev (3m)-1.48%
EPS NY rev (1m)-2.28%
EPS NY rev (3m)-1.92%
Revenue NQ rev (1m)-2.72%
Revenue NQ rev (3m)-0.77%
Revenue NY rev (1m)-1.07%
Revenue NY rev (3m)-0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 9.62 | ||
| P/S | 1.03 | ||
| P/FCF | 10.15 | ||
| P/OCF | 9.33 | ||
| P/B | 3.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7 |
EPS(TTM)8.06
EY9.79%
EPS(NY)8.56
Fwd EY10.4%
FCF(TTM)8.11
FCFY9.85%
OCF(TTM)8.82
OCFY10.72%
SpS79.85
BVpS21.34
TBVpS-35.66
PEG (NY)1.66
PEG (5Y)1.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5% | ||
| ROE | 35.31% | ||
| ROCE | 17.62% | ||
| ROIC | 12.96% | ||
| ROICexc | 19.2% | ||
| ROICexgc | N/A | ||
| OM | 14.96% | ||
| PM (TTM) | 9.44% | ||
| GM | 27.13% | ||
| FCFM | 10.15% |
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-Score7
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.44 | ||
| Debt/FCF | 3.8 | ||
| Debt/EBITDA | 2.34 | ||
| Cap/Depr | 58.17% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 15.01 | ||
| Cash Conversion | 66.96% | ||
| Profit Quality | 107.59% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.72 |
F-Score7
WACC7.27%
ROIC/WACC1.78
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)8.48%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%9.55%
EPS Next Y6.15%
EPS Next 2Y7.12%
EPS Next 3Y7.68%
EPS Next 5Y5.76%
Revenue 1Y (TTM)6.79%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%6.43%
Revenue Next Year3.72%
Revenue Next 2Y3.9%
Revenue Next 3Y3.57%
Revenue Next 5Y3.06%
EBIT growth 1Y5.16%
EBIT growth 3Y3.01%
EBIT growth 5Y2.04%
EBIT Next Year15.73%
EBIT Next 3Y9.12%
EBIT Next 5Y6.32%
FCF growth 1Y18.56%
FCF growth 3Y7.57%
FCF growth 5Y-1.91%
OCF growth 1Y21.91%
OCF growth 3Y-3.77%
OCF growth 5Y-1.36%