U.S. Markets open in 2 hrs 23 mins

Here's Why You Should Hold Omnicom (OMC) in Your Portfolio

Zacks Equity Research

Omnicom Group Inc. OMC stock has had an impressive run on the bourse over the past year. Shares have returned 16.8%  against 4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has rallied 3.3%.

With an expected long-term earnings per share growth rate of 5.1% and a market cap of $17.1 billion, Omnicom seems to be a stock that investors should retain in their portfolio for now.

What’s Aiding the Company?

Consistency and diversity of operations and increased focus on delivering consumer-centric strategic business solutions ensure persistent profitability for Omnicom.

Omnicom Group Inc. EPS Diluted (TTM)

Omnicom Group Inc. EPS Diluted (TTM)

Omnicom Group Inc. eps-diluted-ttm | Omnicom Group Inc. Quote

The company remains focused on internal development and operating efficiency initiatives. Its investments in real estate, back office services, procurement, IT, data, analytics and precision marketing are driving operating performance.

Consistent dividend payments and share repurchases indicate Omnicom’s commitment to create shareholders’ value and underline its confidence in the business. The company paid out $280.4 million through dividends and repurchased shares worth $527.6 million in the first six months of 2019.

It paid out dividends of $548.5 million, $515.2 million and $505.4 million and repurchased shares amounting to $ 581.3 million, $568.4 million and $602.2 million, respectively in 2018, 2017 and 2016.

Wrapping Up

Despite riding on significant growth prospects, Omnicom is not free from headwinds. Negative foreign exchange rate impact and weak acquisition revenues, net of disposition revenues have been weighing on the company’s top line for the past few quarters. Nevertheless, we believe that investments toward internal development and customer-centrism bode well for Omnicom in the long run.

Zacks Rank & Stocks to Consider

Omnicom currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Fiserv FISV, Huron Consulting HURN and Charles River Associates CRAI. While Fiserv and Huron sport a Zacks Rank #1 (Strong Buy), Charles River carries a Zacks Rank #2 (Buy).

Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated at 13.5%, 13% and 12%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


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
 
Charles River Associates (CRAI) : Free Stock Analysis Report
 
Huron Consulting Group Inc. (HURN) : Free Stock Analysis Report
 
Fiserv, Inc. (FISV) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research