Omnicom Stock Analysis, Valuation (NYSE:OMC)

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$73.74 $1.29 (1.72%) OMC stock closing price Apr 20, 2018 (Closing)
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Omnicom
Updated on : Apr 20, 2018
previous close
OMC 73.7 (0%)
S&P 500 2670.1 (0%)
Closing Price On: Apr 20, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Advertising Marketing Services
Sector :
Business Services
5 Quarter Revenue
Revenue Growth
2018-Q1
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
1.4%
Operating Profit
Operating Margin:
13.5%
Sector Average:
8.4%
5 Quarter Net Profit
Net Margins
2018-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
4.89B
Debt/Equity Ratio:
 1.52
Compared to the industry
Cash Flow
Operating cash flow:
-$620.8M
Net Income:
$264.1M
Dividend Yield
OMC dividend yield:
2.31%
PROS      CONS
Operating Margins
ROIC
ROE
PE Valuation
PS Valuation
Long Term Growth
High Debt Burden
Cash Flow
FCF Margin
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
OMC PS :
1.1
Industry PS :
1.7
Sector:   Business Services.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
20.1%
Return on Equity:
37.4%
Free Cash Flow Margin:
-18.1%
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Omnicom Stock Analysis

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Investors can watch the Amigobulls Omnicom stock analysis video here. Our analyst opinion covering the buy and sell arguments for OMC stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Omnicom Group Inc. Stock Rating 3.1/5

Amigobulls OMC stock analysis relies on business fundamentals such as Omnicom revenue growth, profits and return on equity measures from the latest quarter 2018 Q1 earnings. Omnicom valuation forms a crucial part of our stock analysis. Omnicom stock rating encapsulates our opinion about the company based on the fundamentals.

Should you buy OMC stock?

  • Omnicom's average operating margin of 13.5% was exceptional.
  • The Omnicom stock currently trades at a price to earnings ratio of 18.1. We rate this as a positive, compared to the industry average of 22.2.
  • The lower PS ratio 1.1 for OMC stock versus Advertising Marketing Services industry average of 1.7 is a positive for the company.
  • Omnicom generates a high return on invested capital of 20.1%.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Omnicom at 37.4%.

Should you sell OMC stock?

  • Long term revenue growth of 1.4% over the past 5 years has been disappointing.
  • Omnicom is debt laden and has a high debt/equity ratio of  1.52.
  • The company has negative Free Cash Flows (FCF), with a negative FCF margin of -18.1%.

Comments on this video and Omnicom stock

Investors can make use of the Amigobulls Omnicom stock analysis to ascertain how OMC stock fares in fundamental analysis investment criteria. Fundamentals of a company give detailed information which helps in making invesment decisions.

While doing a study of the company financials, Omnicom revenue growth and profit or net income are two main metrics which help in identifying whether OMC stock is overvalued or undervalued. Along with fundamentals, investors can utilize technical analysis to get a better idea about the price trend of Omnicom stock.