Shares of Omnicom Group Inc. OMC have gained 15% year to date, outperforming the 11.7% rally of the industry it belongs to.
With expected EPS growth rate of 4.7% and a market cap of $18.6 billion, it is a stock that investors should retain in their portfolio.
Factors That Bode Well
Prudent investments are expected to generate significant organic revenue growth for Omnicom going forward. The company is investing in real estate, back office services, procurement, IT, data, analytics and precision marketing.
Consistency and diversity of operations and increased focus on delivering consumer-centric strategic business solutions ensure persistent profitability for the company.
A consistent track record of dividend payment and share repurchase indicates the company’s commitment to create shareholders’ value and underline confidence in its business.
Consistent dividend payments and share repurchases indicate the company’s commitment to create shareholders’ value and underline its confidence in the business.
Omnicom paid 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.
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).
A few better-ranked stocks in the broader Zacks Business Services sector are Broadridge BR, Accenture ACN and Automatic Data Processing ADP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected EPS (three to five years) growth rate for Broadridge, Accenture and Automatic Data Processing is 10%, 10.3% and 13%, respectively.
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
Accenture PLC (ACN) : Free Stock Analysis Report
Broadridge Financial Solutions, Inc. (BR) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research