OMNICOM GROUP (OMC) Stock Fundamental Analysis
USA - NYSE:OMC - US6819191064 - Common Stock
75.01 USD
-1.03 (-1.35%)
75.01 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 correct valuation and a medium growth rate. Finally 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.
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 Return On Assets of 4.79%. This is in the better half of the industry: OMC outperforms 77.78% of its industry peers.
OMC's Return On Equity of 30.74% is amongst the best of the industry. OMC outperforms 93.94% of its industry peers.
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.
The Average Return On Invested Capital over the past 3 years for OMC 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
Looking at the Profit Margin, with a value of 8.67%, OMC is in the better half of 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.
In the last couple of years the Operating Margin of OMC has remained more or less at the same level.
OMC has a Gross Margin of 26.98%. This is in the lower half of the industry: OMC underperforms 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so OMC is creating value.
The number of shares outstanding for OMC has been reduced compared to 1 year ago.
OMC has less shares outstanding than it did 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 1.71. This is a bad value and indicates that OMC is not financially healthy and even has some risk of bankruptcy.
OMC has a Altman-Z score of 1.71. This is in the better half of the industry: OMC outperforms 62.63% of its industry peers.
The Debt to FCF ratio of OMC is 3.57, which is a good value as it means it would take OMC, 3.57 years of fcf income to pay off all of its debts.
OMC's Debt to FCF ratio of 3.57 is fine compared to the rest of the industry. OMC outperforms 77.78% of its industry peers.
A Debt/Equity ratio of 1.09 is on the high side and indicates that OMC has dependencies on debt financing.
The Debt to Equity ratio of OMC (1.09) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 3.57 | ||
| Altman-Z | 1.71 |
ROIC/WACC2.06
WACC6.8%
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.
OMC has a worse Current ratio (0.92) 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 worse Quick ratio (0.87) than 67.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
OMC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.64%.
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.
The Revenue has been growing slightly by 0.96% on average over the past years.
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
Based on estimates for the next years, OMC will show a small growth in Earnings Per Share. The EPS will grow by 5.40% on average per year.
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
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
Based on the Price/Earnings ratio of 9.16, the valuation of OMC can be described as reasonable.
OMC's Price/Earnings ratio is a bit cheaper when compared to the industry. OMC is cheaper than 79.80% of the companies in the same industry.
OMC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.38.
OMC is valuated reasonably with a Price/Forward Earnings ratio of 8.03.
Compared to the rest of the industry, the Price/Forward Earnings ratio of OMC indicates a somewhat cheap valuation: OMC is cheaper than 77.78% of the companies listed in the same industry.
OMC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.16 | ||
| Fwd PE | 8.03 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OMC is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, OMC is valued a bit cheaper than the industry average as 76.77% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.22 | ||
| 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.
The decent profitability rating of OMC may justify a higher PE ratio.
PEG (NY)1.31
PEG (5Y)1.56
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.
OMC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| 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 been paying a dividend for at least 10 years, so it has 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.
The dividend of OMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.97%
EPS Next 2Y7.68%
EPS Next 3Y7.95%
75.01
-1.03 (-1.35%)
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 Cap14.53B
Analysts75
Price Target97.52 (30.01%)
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 | 9.16 | ||
| Fwd PE | 8.03 | ||
| P/S | 0.91 | ||
| P/FCF | 8.22 | ||
| P/OCF | 7.58 | ||
| P/B | 3.24 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.76 |
EPS(TTM)8.19
EY10.92%
EPS(NY)9.35
Fwd EY12.46%
FCF(TTM)9.12
FCFY12.16%
OCF(TTM)9.9
OCFY13.19%
SpS82.13
BVpS23.16
TBVpS-36.25
PEG (NY)1.31
PEG (5Y)1.56
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
WACC6.8%
ROIC/WACC2.06
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%