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Interpublic Boosts Share Repurchase

Zacks Equity Research

Global advertising firm The Interpublic Group of Companies, Inc. (IPG) recently announced that its board of directors authorized an increase in its share repurchase program from $300 million to $500 million. The authorization entails the company to repurchase additional shares worth $200 million resulting from the conversion of 4.75% convertible Notes.

During 2012, Interpublic repurchased 32.7 million shares for $350.5 million and share count decreased by about 11%. Over the years, Interpublic has consistently returned significant cash to its shareholders through dividends and share repurchases. The company paid a first quarter 2013 dividend of 7.5 cents or 30 cents per share on an annualized basis, which marked a year-over-year hike of 25%.

Moving ahead, the company plans to focus on debt reduction opportunities for improving its balance sheet and reducing effective cost of debt. Interpublic’s best-in-industry talent pool and expertise are expected to offer optimal and affordable solutions, thus rendering an edge over its peers.

New York-based, Interpublic together with its subsidiaries, provides advertising and marketing services worldwide. The company is the third largest advertising company in the world.

It offers a range of advertising and marketing communication services, as well as marketing services, public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting services to a broad list of customers in more than 100 countries.

Interpublic focuses on point-to-point client interaction, which enables accurate decision-making and enhanced customer focus. The company has two revenue segments, Integrated Agency Networks (:IAN), comprising Draftfcb, Lowe, McCann Worldgroup, Mediabrands and domestic integrated agencies, and Constituency Management Group (CMG), consisting of a number of specialist marketing service offerings.

Other companies in the industry worth mentioning include Omnicom Group Inc. (OMC), Publicis Groupe SA (PUBGY) and WPP plc (WPPGY). Interpublic currently has a Zacks Rank #3 (Hold).

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