Here's Why You Should Retain Omnicom (OMC) Stock For Now
Omnicom (OMC) focuses on investing in real estate, back-office services, procurement and IT.
Omnicom Group Inc. OMC has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company has an expected long-term (three to five years) earnings per share growth rate of 8.2%. Its earnings for 2021 and 2022 are expected to grow 21.6% and 4.8% year over year, respectively.
The stock has gained 35.2% over the past year, outperforming the 32.5% growth of the Zacks S&P 500 composite.
What’s Supporting the Rally?
Omnicom continues to focus on its internal development initiatives. To increase operational efficiency, the company has been making investments in real estate, back-office services, procurement and IT. It is also investing in data, analytics and precision marketing. Driven by such positives, we expect Omnicom to witness higher revenues on the back of organic growth.
Omnicom’s bottom line is in good shape as the company has been divesting underperforming and non-core businesses, and reorganizing itself to meet clients’ ever-changing needs. We believe that consistency and diversity of Omnicom's operations and increased focus on delivering consumer-centric strategic business solutions, ensures long-term profitability for Omnicom.
Omnicom has a consistent record of returning value to shareholders in the form of dividend and share repurchases. It paid a respective $562.7 million, $564.3 million and $548.5 million in dividends in 2020, 2019 and 2018. The company repurchased shares worth $222 million, $610.2 and $581.3 million, respectively, in 2020, 2019 and 2018.
Debt Woe Stays
Omnicom’s cash and cash equivalent balance of $4.4 billion at the end of second-quarter 2021 was well below the total debt level $5.3 billion, underscoring that the company doesn’t have enough cash to meet its debt burden. The cash level, however, can meet the short-term debt of $9 million.
Zacks Rank and Stocks to Consider
Omnicom currently carries a Zacks Rank #3 (Hold).
The long-term expected earnings per share (three to five years) growth rate for Cross Country Healthcare, Equifax and TransUnion is 9.9%, 15.2% and 22%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Omnicom Group Inc. (OMC): Free Stock Analysis Report
Equifax, Inc. (EFX): Free Stock Analysis Report
Cross Country Healthcare, Inc. (CCRN): Free Stock Analysis Report
TransUnion (TRU): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research