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The Interpublic Group of Companies, Inc. IPG is a marketing and advertising services provider that has performed well in the past six months and has the potential to sustain the momentum in the near term. If you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Interpublic an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained a massive 76.8% over the past six months compared with 71.3% rise of the industry it belongs to.
Solid Rank & VGM Score: Interpublic currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Three estimates for 2021 moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2021 earnings has moved up 5.9% in the past 60 days.
Positive Earnings Surprise History: Interpublic has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering an earnings surprise of 21.3%, on average.
Strong Growth Prospects: The company’s Zacks Consensus Estimate for 2021 earnings of $1.96 reflects year-over-year growth of 13.3%. Moreover, earnings are expected to register 9.1% growth in 2022. The stock’s long-term expected earnings per share growth rate is 13.5%.
Driving Factors: Interpublic’s digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters, based on diversification across emerging regions and collaboration/integration across agencies through technological improvement. Moreover, the company continues to look for strategic investments/acquisitions to expand in high-growth regions and key world markets.
Interpublic puts consistent efforts in rewarding its shareholders. In 2020 and 2019, the company paid $398.1 million and $363.1 million in dividends, respectively, and did not repurchase any share. In 2018 and 2017, the company paid $322.1 million and $280.3 million in dividend and repurchased shares worth $117.1 million and $300.1 million, respectively. Such moves not only instill investors’ confidence, but also positively impact earnings per share.
Other Stocks to Consider
Other stocks worth considering in the broader Zacks Business Services sector are Gartner IT, Cross Country Healthcare CCRN and Charles River Associates CRAI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for Gartner, Cross Country Healthcare and Charles River is pegged at 13.5%, 12% and 13%, respectively.
Zacks Top 10 Stocks for 2021
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Charles River Associates (CRAI) : Free Stock Analysis Report
Interpublic Group of Companies, Inc. The (IPG) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
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