OMNICOM GROUP (OMC) Stock Fundamental Analysis
USA - NYSE:OMC - US6819191064 - Common Stock
76.04 USD
-0.56 (-0.73%)
76.04 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to OMC. OMC was compared to 99 industry peers in the Media industry. OMC has an excellent profitability rating, but there are concerns on its financial health. OMC has a decent growth rate and is not valued too expensively. 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.
In the past 5 years OMC always reported a positive cash flow from operatings.
1.2 Ratios
OMC has a better Return On Assets (4.79%) than 77.78% of its industry peers.
With an excellent Return On Equity value of 30.74%, OMC belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 14.03%, OMC belongs to the top of the industry, outperforming 93.94% 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 above the industry average of 8.87%.
The last Return On Invested Capital (14.03%) for OMC is above the 3 year average (13.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.79% | ||
| ROE | 30.74% | ||
| ROIC | 14.03% |
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 a decent Profit Margin value of 8.67%, OMC is doing good in the industry, outperforming 76.77% of the companies in the same industry.
OMC's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 14.96%, OMC is doing good in the industry, outperforming 77.78% 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 (26.98%) is worse than 67.68% 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) | 8.67% | ||
| GM | 26.98% |
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.
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.
The debt/assets ratio for OMC is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.71, we must say that OMC is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.71, OMC is doing good in the industry, outperforming 62.63% of the companies in the same industry.
OMC has a debt to FCF ratio of 3.57. This is a good value and a sign of high solvency as OMC would need 3.57 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.57, OMC is doing good in the industry, outperforming 77.78% of the companies in the same industry.
A Debt/Equity ratio of 1.09 is on the high side and indicates that OMC has dependencies on debt financing.
OMC's Debt to Equity ratio of 1.09 is in line compared to the rest of the industry. OMC outperforms 43.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 1.71 |
ROIC/WACC2.07
WACC6.79%
2.3 Liquidity
OMC has a Current 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.
The Current ratio of OMC (0.92) is worse than 65.66% 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 has a Quick ratio of 0.87. This is in the lower half of the industry: OMC underperforms 67.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.64% 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.
The Revenue has been growing slightly by 5.21% in the past 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)6.64%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%5.13%
Revenue 1Y (TTM)5.21%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%4.2%
3.2 Future
OMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.40% yearly.
OMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.19% yearly.
EPS Next Y6.97%
EPS Next 2Y7.68%
EPS Next 3Y7.95%
EPS Next 5Y5.4%
Revenue Next Year3.75%
Revenue Next 2Y6.41%
Revenue Next 3Y5.83%
Revenue Next 5Y2.19%
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
Based on the Price/Earnings ratio of 9.28, the valuation of OMC can be described as reasonable.
79.80% of the companies in the same industry are more expensive than OMC, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of OMC to the average of the S&P500 Index (27.41), we can say OMC is valued rather cheaply.
OMC is valuated reasonably with a Price/Forward Earnings ratio of 8.14.
Based on the Price/Forward Earnings ratio, OMC is valued a bit cheaper than 77.78% 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 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.28 | ||
| Fwd PE | 8.14 |
4.2 Price Multiples
OMC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. OMC is cheaper than 77.78% of the companies in the same industry.
76.77% of the companies in the same industry are more expensive than OMC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.34 | ||
| EV/EBITDA | 6.76 |
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 a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.33
PEG (5Y)1.58
EPS Next 2Y7.68%
EPS Next 3Y7.95%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.60%, OMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.58, OMC pays a better dividend. On top of this OMC pays more dividend than 83.84% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, OMC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.6% |
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
39.97% 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.
DP39.97%
EPS Next 2Y7.68%
EPS Next 3Y7.95%
76.04
-0.56 (-0.73%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners108.43%
Inst Owner Change6.43%
Ins Owners1.17%
Ins Owner Change7.11%
Market Cap14.73B
Analysts75
Price Target97.52 (28.25%)
Short Float %14.76%
Short Ratio7.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.6% |
Yearly Dividend2.8
Dividend Growth(5Y)1.83%
DP39.97%
Div Incr Years0
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.83%
Min EPS beat(2)1.66%
Max EPS beat(2)3.99%
EPS beat(4)3
Avg EPS beat(4)1.53%
Min EPS beat(4)-0.42%
Max EPS beat(4)3.99%
EPS beat(8)6
Avg EPS beat(8)1.69%
EPS beat(12)9
Avg EPS beat(12)2.75%
EPS beat(16)13
Avg EPS beat(16)4.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.65%
Min Revenue beat(2)-1.67%
Max Revenue beat(2)0.36%
Revenue beat(4)2
Avg Revenue beat(4)-0.16%
Min Revenue beat(4)-1.67%
Max Revenue beat(4)1.27%
Revenue beat(8)3
Avg Revenue beat(8)-0.09%
Revenue beat(12)6
Avg Revenue beat(12)0.11%
Revenue beat(16)9
Avg Revenue beat(16)0.52%
PT rev (1m)0%
PT rev (3m)-3.23%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)4.14%
EPS NY rev (1m)2.24%
EPS NY rev (3m)2.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.8%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)1.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.28 | ||
| Fwd PE | 8.14 | ||
| P/S | 0.93 | ||
| P/FCF | 8.34 | ||
| P/OCF | 7.68 | ||
| P/B | 3.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.76 |
EPS(TTM)8.19
EY10.77%
EPS(NY)9.35
Fwd EY12.29%
FCF(TTM)9.12
FCFY12%
OCF(TTM)9.9
OCFY13.01%
SpS82.13
BVpS23.16
TBVpS-36.25
PEG (NY)1.33
PEG (5Y)1.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.79% | ||
| ROE | 30.74% | ||
| ROCE | 19.08% | ||
| ROIC | 14.03% | ||
| ROICexc | 19.07% | ||
| ROICexgc | N/A | ||
| OM | 14.96% | ||
| PM (TTM) | 8.67% | ||
| GM | 26.98% | ||
| FCFM | 11.11% |
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-Score5
Asset Turnover0.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 3.57 | ||
| Debt/EBITDA | 1.87 | ||
| Cap/Depr | 62.61% | ||
| Cap/Sales | 0.94% | ||
| Interest Coverage | 12.53 | ||
| Cash Conversion | 73.17% | ||
| Profit Quality | 128.13% | ||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.71 |
F-Score5
WACC6.79%
ROIC/WACC2.07
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)6.64%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%5.13%
EPS Next Y6.97%
EPS Next 2Y7.68%
EPS Next 3Y7.95%
EPS Next 5Y5.4%
Revenue 1Y (TTM)5.21%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%4.2%
Revenue Next Year3.75%
Revenue Next 2Y6.41%
Revenue Next 3Y5.83%
Revenue Next 5Y2.19%
EBIT growth 1Y4.91%
EBIT growth 3Y3.01%
EBIT growth 5Y2.04%
EBIT Next Year13.35%
EBIT Next 3Y11.32%
EBIT Next 5Y6.32%
FCF growth 1Y119.22%
FCF growth 3Y7.57%
FCF growth 5Y-1.91%
OCF growth 1Y117.4%
OCF growth 3Y-3.77%
OCF growth 5Y-1.36%