INTERPUBLIC GROUP OF COS INC (IPG) Stock Fundamental Analysis
NYSE:IPG - New York Stock Exchange, Inc. - US4606901001 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to IPG. IPG was compared to 97 industry peers in the Media industry. While IPG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. IPG has a bad growth rate and is valued cheaply. Finally IPG also has an excellent dividend rating. This makes IPG very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
IPG had positive earnings in the past year.
IPG had a positive operating cash flow in the past year.
IPG had positive earnings in each of the past 5 years.
Each year in the past 5 years IPG had a positive operating cash flow.
1.2 Ratios
IPG's Return On Assets of 2.88% is fine compared to the rest of the industry. IPG outperforms 76.29% of its industry peers.
The Return On Equity of IPG (13.77%) is better than 83.51% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.47%, IPG belongs to the top of the industry, outperforming 94.85% of the companies in the same industry.
IPG had an Average Return On Invested Capital over the past 3 years of 12.24%. This is significantly above the industry average of 6.63%.
The last Return On Invested Capital (12.47%) for IPG is above the 3 year average (12.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 13.77% | ||
| ROIC | 12.47% |
ROA(3y)4.81%
ROA(5y)4.23%
ROE(3y)23.91%
ROE(5y)22.18%
ROIC(3y)12.24%
ROIC(5y)11.44%
1.3 Margins
With a decent Profit Margin value of 4.69%, IPG is doing good in the industry, outperforming 77.32% of the companies in the same industry.
IPG's Profit Margin has been stable in the last couple of years.
IPG has a Operating Margin of 13.37%. This is in the better half of the industry: IPG outperforms 74.23% of its industry peers.
In the last couple of years the Operating Margin of IPG has grown nicely.
With a Gross Margin value of 17.06%, IPG is not doing good in the industry: 76.29% of the companies in the same industry are doing better.
IPG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.37% | ||
| PM (TTM) | 4.69% | ||
| GM | 17.06% |
OM growth 3Y-1.81%
OM growth 5Y4.07%
PM growth 3Y-11.51%
PM growth 5Y0.1%
GM growth 3Y-2.02%
GM growth 5Y3.12%
2. Health
2.1 Basic Checks
IPG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, IPG has less shares outstanding
IPG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, IPG has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.68, we must say that IPG is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of IPG (1.68) is better than 64.95% of its industry peers.
The Debt to FCF ratio of IPG is 2.82, which is a good value as it means it would take IPG, 2.82 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.82, IPG belongs to the top of the industry, outperforming 84.54% of the companies in the same industry.
A Debt/Equity ratio of 0.82 indicates that IPG is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.82, IPG is in line with its industry, outperforming 53.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 2.82 | ||
| Altman-Z | 1.68 |
ROIC/WACC1.55
WACC8.06%
2.3 Liquidity
A Current Ratio of 1.07 indicates that IPG should not have too much problems paying its short term obligations.
IPG's Current ratio of 1.07 is on the low side compared to the rest of the industry. IPG is outperformed by 63.92% of its industry peers.
A Quick Ratio of 1.07 indicates that IPG should not have too much problems paying its short term obligations.
IPG's Quick ratio of 1.07 is on the low side compared to the rest of the industry. IPG is outperformed by 62.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
IPG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.14%.
Measured over the past 5 years, IPG shows a small growth in Earnings Per Share. The EPS has been growing by 7.46% on average per year.
Looking at the last year, IPG shows a decrease in Revenue. The Revenue has decreased by -3.18% in the last year.
The Revenue has been growing slightly by 0.90% on average over the past years.
EPS 1Y (TTM)-2.14%
EPS 3Y2.26%
EPS 5Y7.46%
EPS Q2Q%-8.33%
Revenue 1Y (TTM)-3.18%
Revenue growth 3Y1.45%
Revenue growth 5Y0.9%
Sales Q2Q%-8.55%
3.2 Future
The Earnings Per Share is expected to grow by 2.96% on average over the next years.
Based on estimates for the next years, IPG will show a small growth in Revenue. The Revenue will grow by 0.76% on average per year.
EPS Next Y-5.2%
EPS Next 2Y1.28%
EPS Next 3Y2.96%
EPS Next 5YN/A
Revenue Next Year-5.79%
Revenue Next 2Y-1.6%
Revenue Next 3Y0.04%
Revenue Next 5Y0.76%
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 decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.23, the valuation of IPG can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of IPG indicates a rather cheap valuation: IPG is cheaper than 81.44% of the companies listed in the same industry.
IPG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.22.
IPG is valuated reasonably with a Price/Forward Earnings ratio of 8.90.
IPG's Price/Forward Earnings ratio is rather cheap when compared to the industry. IPG is cheaper than 82.47% of the companies in the same industry.
IPG is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 8.9 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, IPG is valued a bit cheaper than 74.23% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, IPG is valued cheaper than 80.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.96 | ||
| EV/EBITDA | 6.19 |
4.3 Compensation for Growth
The excellent profitability rating of IPG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.24
EPS Next 2Y1.28%
EPS Next 3Y2.96%
5. Dividend
5.1 Amount
IPG has a Yearly Dividend Yield of 5.25%, which is a nice return.
IPG's Dividend Yield is rather good when compared to the industry average which is at 4.96. IPG pays more dividend than 90.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, IPG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.25% |
5.2 History
On average, the dividend of IPG grows each year by 7.02%, which is quite nice.
IPG has been paying a dividend for at least 10 years, so it has a reliable track record.
IPG has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.02%
Div Incr Years12
Div Non Decr Years13
5.3 Sustainability
100.30% of the earnings are spent on dividend by IPG. This is not a sustainable payout ratio.
IPG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP100.3%
EPS Next 2Y1.28%
EPS Next 3Y2.96%
25.38
+0.43 (+1.72%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners102.22%
Inst Owner Change-0.41%
Ins Owners0.23%
Ins Owner Change5.56%
Market Cap9.38B
Analysts73.33
Price Target34.34 (35.3%)
Short Float %7.99%
Short Ratio3.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.25% |
Yearly Dividend1.32
Dividend Growth(5Y)7.02%
DP100.3%
Div Incr Years12
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.04%
Min EPS beat(2)-6.3%
Max EPS beat(2)20.37%
EPS beat(4)2
Avg EPS beat(4)3.7%
Min EPS beat(4)-6.3%
Max EPS beat(4)20.37%
EPS beat(8)4
Avg EPS beat(8)1.03%
EPS beat(12)7
Avg EPS beat(12)2.56%
EPS beat(16)11
Avg EPS beat(16)8.72%
Revenue beat(2)1
Avg Revenue beat(2)6.9%
Min Revenue beat(2)-0.18%
Max Revenue beat(2)13.99%
Revenue beat(4)1
Avg Revenue beat(4)2.29%
Min Revenue beat(4)-3.54%
Max Revenue beat(4)13.99%
Revenue beat(8)1
Avg Revenue beat(8)0.03%
Revenue beat(12)4
Avg Revenue beat(12)3.77%
Revenue beat(16)8
Avg Revenue beat(16)7.07%
PT rev (1m)0.93%
PT rev (3m)2.67%
EPS NQ rev (1m)-1.1%
EPS NQ rev (3m)-11%
EPS NY rev (1m)-2.07%
EPS NY rev (3m)-5.34%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)-6.12%
Revenue NY rev (1m)2.11%
Revenue NY rev (3m)-2.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.23 | ||
| Fwd PE | 8.9 | ||
| P/S | 0.89 | ||
| P/FCF | 8.96 | ||
| P/OCF | 7.98 | ||
| P/B | 2.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.19 |
EPS(TTM)2.75
EY10.84%
EPS(NY)2.85
Fwd EY11.24%
FCF(TTM)2.83
FCFY11.16%
OCF(TTM)3.18
OCFY12.53%
SpS28.45
BVpS9.69
TBVpS-4.97
PEG (NY)N/A
PEG (5Y)1.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 13.77% | ||
| ROCE | 16.98% | ||
| ROIC | 12.47% | ||
| ROICexc | 16.09% | ||
| ROICexgc | 100.93% | ||
| OM | 13.37% | ||
| PM (TTM) | 4.69% | ||
| GM | 17.06% | ||
| FCFM | 9.96% |
ROA(3y)4.81%
ROA(5y)4.23%
ROE(3y)23.91%
ROE(5y)22.18%
ROIC(3y)12.24%
ROIC(5y)11.44%
ROICexc(3y)16.75%
ROICexc(5y)16.19%
ROICexgc(3y)154.9%
ROICexgc(5y)748.63%
ROCE(3y)16.68%
ROCE(5y)15.58%
ROICexcg growth 3Y-66.71%
ROICexcg growth 5Y8.87%
ROICexc growth 3Y-3.72%
ROICexc growth 5Y7.42%
OM growth 3Y-1.81%
OM growth 5Y4.07%
PM growth 3Y-11.51%
PM growth 5Y0.1%
GM growth 3Y-2.02%
GM growth 5Y3.12%
F-Score6
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.82 | ||
| Debt/FCF | 2.82 | ||
| Debt/EBITDA | 1.78 | ||
| Cap/Depr | 50.33% | ||
| Cap/Sales | 1.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.76% | ||
| Profit Quality | 212.15% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 1.68 |
F-Score6
WACC8.06%
ROIC/WACC1.55
Cap/Depr(3y)62.54%
Cap/Depr(5y)62.81%
Cap/Sales(3y)1.53%
Cap/Sales(5y)1.67%
Profit Quality(3y)70.86%
Profit Quality(5y)177.68%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.14%
EPS 3Y2.26%
EPS 5Y7.46%
EPS Q2Q%-8.33%
EPS Next Y-5.2%
EPS Next 2Y1.28%
EPS Next 3Y2.96%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.18%
Revenue growth 3Y1.45%
Revenue growth 5Y0.9%
Sales Q2Q%-8.55%
Revenue Next Year-5.79%
Revenue Next 2Y-1.6%
Revenue Next 3Y0.04%
Revenue Next 5Y0.76%
EBIT growth 1Y-4.79%
EBIT growth 3Y-0.39%
EBIT growth 5Y5.01%
EBIT Next Year13.04%
EBIT Next 3Y8.29%
EBIT Next 5Y5.28%
FCF growth 1Y103.58%
FCF growth 3Y-21.39%
FCF growth 5Y-7.25%
OCF growth 1Y69.2%
OCF growth 3Y-20.19%
OCF growth 5Y-7.15%