NYSE:IPG

Stock Analysis Report

Interpublic Group of Companies

Executive Summary

The Interpublic Group of Companies, Inc. provides advertising and marketing services worldwide.

Rewards

Trading at 43.8% below its fair value

Earnings are forecast to grow 6.87% per year

Earnings grew by 19.9% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Significant insider selling over the past 3 months



Snowflake Analysis

Solid track record, good value and pays a dividend.


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Share Price & News

How has Interpublic Group of Companies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IPG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.5%

IPG

3.2%

US Media

2.0%

US Market


1 Year Return

8.5%

IPG

29.7%

US Media

23.6%

US Market

Return vs Industry: IPG underperformed the US Media industry which returned 29.5% over the past year.

Return vs Market: IPG underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

IPGIndustryMarket
7 Day4.5%3.2%2.0%
30 Day6.0%5.2%3.9%
90 Day16.9%8.8%12.0%
1 Year13.4%8.5%31.5%29.7%26.2%23.6%
3 Year17.0%4.6%23.2%18.1%53.2%43.3%
5 Year37.8%17.3%46.5%34.9%75.7%56.3%

Price Volatility Vs. Market

How volatile is Interpublic Group of Companies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Interpublic Group of Companies undervalued compared to its fair value and its price relative to the market?

42.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IPG ($23.63) is trading below our estimate of fair value ($42.04)

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


Price To Earnings Ratio

PE vs Industry: IPG is good value based on its PE Ratio (13.9x) compared to the Media industry average (14.4x).

PE vs Market: IPG is good value based on its PE Ratio (13.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: IPG is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: IPG is overvalued based on its PB Ratio (3.7x) compared to the US Media industry average (1.4x).


Next Steps

Future Growth

How is Interpublic Group of Companies forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

6.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IPG's forecast earnings growth (6.9% per year) is above the savings rate (1.7%).

Earnings vs Market: IPG's earnings (6.9% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: IPG's revenue (2.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: IPG's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IPG's Return on Equity is forecast to be high in 3 years time (25.8%)


Next Steps

Past Performance

How has Interpublic Group of Companies performed over the past 5 years?

7.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IPG has high quality earnings.

Growing Profit Margin: IPG's current net profit margins (7.6%) are higher than last year (7%).


Past Earnings Growth Analysis

Earnings Trend: IPG's earnings have grown by 7.1% per year over the past 5 years.

Accelerating Growth: IPG's earnings growth over the past year (19.9%) exceeds its 5-year average (7.1% per year).

Earnings vs Industry: IPG earnings growth over the past year (19.9%) exceeded the Media industry -30.3%.


Return on Equity

High ROE: Whilst IPG's Return on Equity (25.08%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Interpublic Group of Companies's financial position?


Financial Position Analysis

Short Term Liabilities: IPG's short term assets ($7.1B) do not cover its short term liabilities ($7.4B).

Long Term Liabilities: IPG's short term assets ($7.1B) exceed its long term liabilities ($5.9B).


Debt to Equity History and Analysis

Debt Level: IPG's debt to equity ratio (134.5%) is considered high.

Reducing Debt: IPG's debt to equity ratio has increased from 74.1% to 134.5% over the past 5 years.

Debt Coverage: IPG's debt is well covered by operating cash flow (36.4%).

Interest Coverage: IPG's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: IPG's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Interpublic Group of Companies's current dividend yield, its reliability and sustainability?

3.89%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: IPG's dividend (3.98%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: IPG's dividend (3.98%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, IPG has been paying a dividend for less than 10 years.

Growing Dividend: IPG's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54%), IPG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IPG's dividends in 3 years are forecast to be covered by earnings (51.5% payout ratio).


Next Steps

Management

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

7.9yrs

Average management tenure


CEO

Michael Roth (74yo)

15yrs

Tenure

US$16,970,730

Compensation

Mr. Michael Isor Roth, also known as Michael, serves as the Chief Executive Officer of The Interpublic Group of Companies, Inc since January 19, 2005. Mr. Roth has been Chairman and Director of The Interpu ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD16.97M) is above average for companies of similar size in the US market ($USD6.46M).

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


Management Age and Tenure

7.9yrs

Average Tenure

55.5yo

Average Age

Experienced Management: IPG's management team is seasoned and experienced (7.9 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$74,89427 Nov 19
Linda Sanford
EntityIndividual
Shares3,363
Max PriceUS$22.27
SellUS$237,63914 Nov 19
Julie Connors
EntityIndividual
Shares10,690
Max PriceUS$22.23
SellUS$220,02601 Nov 19
H. Greeniaus
EntityIndividual
Shares10,000
Max PriceUS$22.00
SellUS$2,210,41930 Oct 19
Michael Roth
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares100,314
Max PriceUS$22.04
SellUS$1,022,12901 Aug 19
H. Greeniaus
EntityIndividual
Shares44,396
Max PriceUS$23.02
BuyUS$199,98802 May 19
H. Greeniaus
EntityIndividual
Shares8,650
Max PriceUS$23.12
BuyUS$199,98802 May 19
David Thomas
EntityIndividual
Shares8,650
Max PriceUS$23.12
SellUS$130,26814 Mar 19
Jocelyn Carter-Miller
EntityIndividual
Shares5,800
Max PriceUS$22.46
SellUS$4,566,70604 Mar 19
Michael Roth
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares198,985
Max PriceUS$22.95
SellUS$1,137,24104 Mar 19
Frank Mergenthaler
EntityIndividual
Role
Senior Key Executive
Shares49,553
Max PriceUS$22.95
SellUS$1,052,64804 Mar 19
Philippe Krakowsky
EntityIndividual
Role
Unit Chairman
Executive VP
Shares45,867
Max PriceUS$22.95
SellUS$646,75404 Mar 19
Andrew Bonzani
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares28,181
Max PriceUS$22.95
SellUS$413,10004 Mar 19
Christopher Carroll
EntityIndividual
Role
Chief Accounting Officer
Senior VP
Shares18,000
Max PriceUS$22.95
SellUS$228,70004 Mar 19
Ellen Johnson
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares10,000
Max PriceUS$22.87

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Frank Mergenthaler (58yo)

    • Tenure: 0.08yrs
    • Compensation: US$5.61m
  • Michael Roth (74yo)

    Chairman & CEO

    • Tenure: 15yrs
    • Compensation: US$16.97m
  • Andrew Bonzani (55yo)

    Executive VP

    • Tenure: 7.9yrs
    • Compensation: US$2.89m
  • Philippe Krakowsky (56yo)

    Executive VP

    • Tenure: 3.9yrs
    • Compensation: US$7.99m
  • Bob Greenberg

    Founder

    • Ellen Johnson (54yo)

      Executive VP & CFO

      • Compensation: US$1.93m
    • Bill Imada

      Founder

      • Chris Carroll (53yo)

        Senior VP

        • Tenure: 13.8yrs
        • Compensation: US$1.73m
      • Virginia Devlin

        Founder & President of Current Lifestyle Marketing

        • John Halper

          Chief Information Officer & Senior VP


          Board Members

          • Michael Roth (74yo)

            Chairman & CEO

            • Tenure: 15yrs
            • Compensation: US$16.97m
          • Howard Draft (65yo)

            Executive Chairman of Draftfcb

            • Josh McCall

              Chairman & CEO of Jack Morton Worldwide

              • Philippe Krakowsky (56yo)

                Executive VP

                • Tenure: 3.9yrs
                • Compensation: US$7.99m
              • Bob Greenberg

                Founder

                • Bill Imada

                  Founder

                  • Fred Cook

                    Chairman of GolinHarris

                    • John Adams

                      Chairman of the Martin Agency

                      • Chris Weil

                        Chairman of Momentum Worldwide and Chief Executive Officer of Momentum Worldwide

                        • Jose Cubas

                          Chairman of Siboney and Chief Executive Officer of Siboney

                          Company Information

                          The Interpublic Group of Companies, Inc.'s company bio, employee growth, exchange listings and data sources


                          Key Information

                          • Name: The Interpublic Group of Companies, Inc.
                          • Ticker: IPG
                          • Exchange: NYSE
                          • Founded: 1902
                          • Industry: Advertising
                          • Sector: Media
                          • Market Cap: US$9.364b
                          • Shares outstanding: 387.73m
                          • Website: https://www.interpublic.com

                          Number of Employees


                          Location

                          • The Interpublic Group of Companies, Inc.
                          • 909 Third Avenue
                          • New York
                          • New York
                          • 10022
                          • United States

                          Listings

                          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                          IPGNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1971
                          IPGDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1971
                          0JCKLSE (London Stock Exchange)YesCommon StockGBUSDOct 1971

                          Biography

                          The Interpublic Group of Companies, Inc. provides advertising and marketing services worldwide. The company operates through two segments, Integrated Agency Networks and Constituency Management Group. It offers consumer advertising, digital marketing, communications planning and media buying, public relations, and specialized communications disciplines. The company also provides various diversified services, including public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting. It offers its services under various brands comprising McCann Worldgroup, Foote, Cone & Belding, IPG Mediabrands, Carmichael Lynch, Deutsch, Hill Holliday, and The Martin Agency, as well as Foote, Cone & Belding, and MullenLowe Group. The company was formerly known as McCann-Erickson Incorporated and changed its name to The Interpublic Group of Companies, Inc. in January 1961. The Interpublic Group of Companies, Inc. was founded in 1902 and is headquartered in New York, New York. 


                          Company Analysis and Financial Data Status

                          All financial data provided by Standard & Poor's Capital IQ.
                          DataLast Updated (UTC time)
                          Company Analysis2020/01/18 23:37
                          End of Day Share Price2020/01/17 00:00
                          Earnings2019/09/30
                          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.