LSE:WPP

Stock Analysis Report

Executive Summary

WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services worldwide.

Snowflake

Fundamentals

Undervalued average dividend payer.


Similar Companies

Share Price & News

How has WPP's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.6%

WPP

-0.4%

GB Media

-0.4%

GB Market


1 Year Return

-11.4%

WPP

19.5%

GB Media

2.9%

GB Market

Return vs Industry: WPP underperformed the UK Media industry which returned 19.5% over the past year.

Return vs Market: WPP underperformed the UK Market which returned 2.9% over the past year.


Shareholder returns

WPPIndustryMarket
7 Day-1.6%-0.4%-0.4%
30 Day-9.1%-1.1%-1.4%
90 Day-0.9%3.8%-2.1%
1 Year-5.7%-11.4%23.7%19.5%8.0%2.9%
3 Year-39.1%-47.6%15.5%2.7%18.0%3.6%
5 Year-4.2%-22.2%43.4%16.9%35.8%6.4%

Price Volatility Vs. Market

How volatile is WPP's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is WPP undervalued compared to its fair value and its price relative to the market?

46.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WPP (£9.16) is trading below our estimate of fair value (£17.09)

Significantly Below Fair Value: WPP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WPP is good value based on its PE Ratio (16.3x) compared to the Media industry average (21.5x).

PE vs Market: WPP is good value based on its PE Ratio (16.3x) compared to the UK market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: WPP is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: WPP is good value based on its PB Ratio (1.2x) compared to the GB Media industry average (1.5x).


Next Steps

Future Growth

How is WPP forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

6.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WPP's forecast earnings growth (6.9% per year) is above the savings rate (1.2%).

Earnings vs Market: WPP's earnings (6.9% per year) are forecast to grow slower than the UK market (12.6% per year).

High Growth Earnings: WPP's earnings are forecast to grow, but not significantly.

Revenue vs Market: WPP's revenue is expected to decline over the next 3 years (-4% per year).

High Growth Revenue: WPP's revenue is forecast to decline over the next 3 years (-4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WPP's Return on Equity is forecast to be low in 3 years time (15.6%).


Next Steps

Past Performance

How has WPP performed over the past 5 years?

4.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: WPP's earnings have grown by 4.6% per year over the past 5 years.

Accelerating Growth: WPP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: WPP had negative earnings growth (-62.9%) over the past year, making it difficult to compare to the Media industry average (2.8%).


Return on Equity

High ROE: WPP's Return on Equity (7.8%) is considered low.


Return on Assets

ROA vs Industry: WPP's Return on Assets is below or equal to the Media industry average last year.


Return on Capital Employed

ROCE Improving: WPP's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is WPP's financial position?


Financial Position Analysis

Short Term Liabilities: WPP's short term assets (£15.6B) do not cover its short term liabilities (£16.4B)

Long Term Liabilities: WPP's short term assets (15.6B) exceeds its long term liabilities (8.7B)


Debt to Equity History and Analysis

Debt Level: WPP's debt to equity ratio (64.2%) is considered high

Reducing Debt: WPP's debt to equity ratio has increased from 55.3% to 64.2% over the past 5 years.

Debt Coverage: WPP's debt is well covered by operating cash flow (23.2%).

Interest Coverage: WPP's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet

Inventory Level: WPP has a low level of unsold assets or inventory.

Debt Coverage by Assets: WPP's debt is covered by short term assets (assets are 2.419460x debt).


Next Steps

Dividend

What is WPP's current dividend yield, its reliability and sustainability?

6.55%

Current Dividend Yield


Dividend Yield vs Market

company6.5%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years6.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: WPP's dividend (6.55%) is higher than the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: WPP's dividend (6.55%) is in the top 25% of dividend payers in the UK market (5.36%)

Stable Dividend: WPP's dividend payments have been volatile in the past 10 years.

Growing Dividend: WPP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (106.5%), WPP's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WPP's dividends in 3 years are forecast to be covered by earnings (56.2% payout ratio).


Next Steps

Management

What is the CEO of WPP's salary, the management and board of directors tenure and is there insider trading?

1.0yrs

Average management tenure


CEO

Mark Read (52yo)

1.1yrs

Tenure

UK£1,631,575

Compensation

Mr. Mark Read has been the Chief Executive Officer and Executive Director of WPP Plc since September 3, 2018. Mr. Read was the Joint Chief Operating Officer of WPP Plc since April 14, 2018. He has been the ...


CEO Compensation Analysis

Compensation vs. Market: Mark has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.0yrs

Average Tenure

51yo

Average Age

Experienced Management: WPP's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

4.3yrs

Average Tenure

67.5yo

Average Age

Experienced Board: WPP's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: WPP insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£205,63513 Aug 19
Jacques Alfred Aigrain
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares21,000
Max PriceUK£9.86
BuyUK£76,11613 May 19
Cindy Rose Quackenbush
EntityIndividual
Shares8,000
Max PriceUK£9.51

Ownership Breakdown


Management Team

  • Paul W. Richardson (61yo)

    CFO & Executive Director

    • Tenure: 0yrs
    • Compensation: UK£2.13m
  • Andrew Grant Scott (50yo)

    Chief Operating Officer

    • Tenure: 1.1yrs
  • Mark Read (52yo)

    CEO & Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£1.63m
  • John O’Keeffe

    Global Chief Creative Officer

    • Tenure: 0yrs
  • Stephan Pretorius

    Chief Technology Officer

    • Tenure: 1yrs
  • Fran Butera

    Investor Relations Director

    • Tenure: 0yrs
  • Laurent Ezekiel (45yo)

    Chief Marketing Officer & Chief Growth Officer

    • Tenure: 0.8yrs
  • Chris Wade

    Group Communications Director

    • Tenure: 0yrs
  • Andrea Harris

    Group Chief Counsel & Head of Sustainability

    • Tenure: 0yrs
  • Jacqui Canney (51yo)

    Global Chief People Officer

    • Tenure: 0.3yrs

Board Members

  • John Benard Jackson (90yo)

    Member of Advisory Board

    • Tenure: 0yrs
    • Compensation: UK£45.00k
  • Paul W. Richardson (61yo)

    CFO & Executive Director

    • Tenure: 0yrs
    • Compensation: UK£2.13m
  • Jeremy J. Bullmore (89yo)

    Member of the Advisory Board

    • Tenure: 0yrs
    • Compensation: UK£70.00k
  • Bud Morten (75yo)

    Member of Advisory Board

    • Tenure: 0yrs
  • John Quelch (68yo)

    Member of the Advisory Board

    • Tenure: 0yrs
  • Roberto Quarta (70yo)

    Independent Chairman

    • Tenure: 4.3yrs
    • Compensation: UK£475.00k
  • Jacques Alfred Aigrain (65yo)

    Non-Executive Director

    • Tenure: 6.4yrs
    • Compensation: UK£138.00k
  • Nicole Seligman (63yo)

    Senior Independent Director

    • Tenure: 3.5yrs
    • Compensation: UK£130.00k
  • Mark Read (52yo)

    CEO & Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£1.63m
  • John Hood (67yo)

    Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£118.00k

Company Information

WPP plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: WPP plc
  • Ticker: WPP
  • Exchange: LSE
  • Founded: 1985
  • Industry: Advertising
  • Sector: Media
  • Market Cap: UK£11.562b
  • Shares outstanding: 1.26b
  • Website: https://www.wpp.com

Number of Employees


Location

  • WPP plc
  • Sea Containers
  • 18 Upper Ground
  • London
  • Greater London
  • SE1 9GL
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WPPNYSE (New York Stock Exchange)ADR EACH REPR 5 ORD SHSUSUSDDec 1987
A1KA87DB (Deutsche Boerse AG)ADR EACH REPR 5 ORD SHSDEEURDec 1987
WPPLSE (London Stock Exchange)YesNew Ordinary sharesGBGBPJan 1992
0WPDB (Deutsche Boerse AG)YesNew Ordinary sharesDEEURJan 1992
WPPG.FOTCPK (Pink Sheets LLC)YesNew Ordinary sharesUSUSDJan 1992
WPPLBATS-CHIXE (BATS 'Chi-X Europe')YesNew Ordinary sharesGBGBPJan 1992

Biography

WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services worldwide. The company operates through four segments: Advertising and Media Investment Ma ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 21:31
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.