OMNICOM GROUP (OMC) Stock Fundamental Analysis
NYSE:OMC - New York Stock Exchange, Inc. - US6819191064 - Common Stock - Currency: USD
Overall OMC gets a fundamental rating of 6 out of 10. We evaluated OMC against 96 industry peers in the Media industry. While OMC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. OMC has a correct valuation and a medium growth rate. 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.
In the past 5 years OMC has always been profitable.
Each year in the past 5 years OMC had a positive operating cash flow.
1.2 Ratios
OMC has a better Return On Assets (5.16%) than 82.29% of its industry peers.
Looking at the Return On Equity, with a value of 33.15%, OMC belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
The Return On Invested Capital of OMC (12.76%) is better than 95.83% 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 6.73%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.16% | ||
| ROE | 33.15% | ||
| ROIC | 12.76% |
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 9.21%, OMC belongs to the best of the industry, outperforming 84.38% 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 (14.95%) than 80.21% of its industry peers.
In the last couple of years the Operating Margin of OMC has remained more or less at the same level.
Looking at the Gross Margin, with a value of 27.07%, OMC is doing worse than 67.71% of the companies in the same industry.
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 | 14.95% | ||
| PM (TTM) | 9.21% | ||
| GM | 27.07% |
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.
OMC has less shares outstanding than it did 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 1.78. This is a bad value and indicates that OMC is not financially healthy and even has some risk of bankruptcy.
OMC has a better Altman-Z score (1.78) than 64.58% of its industry peers.
The Debt to FCF ratio of OMC is 4.33, which is a neutral value as it means it would take OMC, 4.33 years of fcf income to pay off all of its debts.
OMC has a better Debt to FCF ratio (4.33) than 75.00% of its industry peers.
A Debt/Equity ratio of 1.40 is on the high side and indicates that OMC has dependencies on debt financing.
OMC has a Debt to Equity ratio of 1.40. This is comparable to the rest of the industry: OMC outperforms 40.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 4.33 | ||
| Altman-Z | 1.78 |
ROIC/WACC1.81
WACC7.05%
2.3 Liquidity
A Current Ratio of 1.01 indicates that OMC should not have too much problems paying its short term obligations.
OMC has a worse Current ratio (1.01) than 64.58% of its industry peers.
A Quick Ratio of 0.94 indicates that OMC may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.94, OMC is doing worse than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.29% over the past year.
OMC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.87% yearly.
Looking at the last year, OMC shows a small growth in Revenue. The Revenue has grown by 5.84% in the last year.
The Revenue has been growing slightly by 0.96% on average over the past years.
EPS 1Y (TTM)7.29%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%1.8%
Revenue 1Y (TTM)5.84%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%1.65%
3.2 Future
OMC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.01% yearly.
OMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.37% yearly.
EPS Next Y4.72%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
EPS Next 5Y5.01%
Revenue Next Year2.39%
Revenue Next 2Y2.75%
Revenue Next 3Y3.14%
Revenue Next 5Y2.37%
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
The Price/Earnings ratio is 9.09, which indicates a very decent valuation of OMC.
Based on the Price/Earnings ratio, OMC is valued cheaper than 81.25% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.03. OMC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 8.23, which indicates a very decent valuation of OMC.
76.04% 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 21.94, OMC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.09 | ||
| Fwd PE | 8.23 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OMC is valued a bit cheaper than 71.88% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of OMC indicates a somewhat cheap valuation: OMC is cheaper than 76.04% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.12 | ||
| EV/EBITDA | 6.58 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of OMC may justify a higher PE ratio.
PEG (NY)1.92
PEG (5Y)1.55
EPS Next 2Y5.29%
EPS Next 3Y5.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.67%, OMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.91, OMC pays a better dividend. On top of this OMC pays more dividend than 83.33% 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.67% |
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 Years33
5.3 Sustainability
OMC pays out 38.05% of its income as dividend. This is a sustainable payout ratio.
The dividend of OMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.05%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
73.53
-2.56 (-3.36%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryMedia
Earnings (Last)
Earnings (Next)
Inst Owners102.18%
Inst Owner Change3.67%
Ins Owners1.12%
Ins Owner Change7.58%
Market Cap14.35B
Analysts75
Price Target100.77 (37.05%)
Short Float %11.91%
Short Ratio6.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.67% |
Yearly Dividend2.8
Dividend Growth(5Y)1.83%
DP38.05%
Div Incr Years0
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.43%
Min EPS beat(2)0.87%
Max EPS beat(2)3.99%
EPS beat(4)3
Avg EPS beat(4)1.16%
Min EPS beat(4)-0.42%
Max EPS beat(4)3.99%
EPS beat(8)5
Avg EPS beat(8)1.42%
EPS beat(12)9
Avg EPS beat(12)3.1%
EPS beat(16)13
Avg EPS beat(16)4.94%
Revenue beat(2)0
Avg Revenue beat(2)-1.14%
Min Revenue beat(2)-1.67%
Max Revenue beat(2)-0.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-1.67%
Max Revenue beat(4)1.27%
Revenue beat(8)2
Avg Revenue beat(8)-0.48%
Revenue beat(12)6
Avg Revenue beat(12)0.23%
Revenue beat(16)9
Avg Revenue beat(16)0.79%
PT rev (1m)-5.5%
PT rev (3m)-9.05%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)-2.33%
EPS NY rev (1m)-0.19%
EPS NY rev (3m)-1.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)-0.32%
Revenue NY rev (3m)-1.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.09 | ||
| Fwd PE | 8.23 | ||
| P/S | 0.91 | ||
| P/FCF | 10.12 | ||
| P/OCF | 9.17 | ||
| P/B | 3.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.58 |
EPS(TTM)8.09
EY11%
EPS(NY)8.93
Fwd EY12.15%
FCF(TTM)7.27
FCFY9.89%
OCF(TTM)8.02
OCFY10.91%
SpS80.72
BVpS22.41
TBVpS-35.47
PEG (NY)1.92
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.16% | ||
| ROE | 33.15% | ||
| ROCE | 17.35% | ||
| ROIC | 12.76% | ||
| ROICexc | 16.99% | ||
| ROICexgc | N/A | ||
| OM | 14.95% | ||
| PM (TTM) | 9.21% | ||
| GM | 27.07% | ||
| FCFM | 9.01% |
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-Score6
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.4 | ||
| Debt/FCF | 4.33 | ||
| Debt/EBITDA | 2.36 | ||
| Cap/Depr | 60.97% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 12.97 | ||
| Cash Conversion | 60.3% | ||
| Profit Quality | 97.83% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.78 |
F-Score6
WACC7.05%
ROIC/WACC1.81
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)7.29%
EPS 3Y8.05%
EPS 5Y5.87%
EPS Q2Q%1.8%
EPS Next Y4.72%
EPS Next 2Y5.29%
EPS Next 3Y5.94%
EPS Next 5Y5.01%
Revenue 1Y (TTM)5.84%
Revenue growth 3Y3.16%
Revenue growth 5Y0.96%
Sales Q2Q%1.65%
Revenue Next Year2.39%
Revenue Next 2Y2.75%
Revenue Next 3Y3.14%
Revenue Next 5Y2.37%
EBIT growth 1Y4.87%
EBIT growth 3Y3.01%
EBIT growth 5Y2.04%
EBIT Next Year15.52%
EBIT Next 3Y8%
EBIT Next 5Y6.32%
FCF growth 1Y62.86%
FCF growth 3Y7.57%
FCF growth 5Y-1.91%
OCF growth 1Y64.95%
OCF growth 3Y-3.77%
OCF growth 5Y-1.36%