NYSE:OMC

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services. More Details


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: OMC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: OMC's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-0.8%

OMC

0.7%

US Media

0.7%

US Market


1 Year Return

-19.0%

OMC

16.7%

US Media

22.2%

US Market

Return vs Industry: OMC underperformed the US Media industry which returned 15.8% over the past year.

Return vs Market: OMC underperformed the US Market which returned 22.7% over the past year.


Shareholder returns

OMCIndustryMarket
7 Day-0.8%0.7%0.7%
30 Day30.7%20.9%11.8%
90 Day17.3%14.5%8.6%
1 Year-15.6%-19.0%18.5%16.7%25.0%22.2%
3 Year-4.8%-14.5%37.7%31.7%49.4%39.5%
5 Year-0.3%-15.1%72.6%60.1%100.2%78.1%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

42.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OMC ($63.67) is trading below our estimate of fair value ($111.51)

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


Price To Earnings Ratio

PE vs Industry: OMC is good value based on its PE Ratio (14.3x) compared to the US Media industry average (22.6x).

PE vs Market: OMC is good value based on its PE Ratio (14.3x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: OMC is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: OMC is overvalued based on its PB Ratio (5.2x) compared to the US Media industry average (1.7x).


Next Steps

Future Growth

How is Omnicom Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OMC's forecast earnings growth (13.7% per year) is above the savings rate (2.2%).

Earnings vs Market: OMC's earnings (13.7% per year) are forecast to grow slower than the US market (21.8% per year).

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

Revenue vs Market: OMC's revenue (3.5% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: OMC's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OMC's Return on Equity is forecast to be high in 3 years time (32.2%)


Next Steps

Past Performance

How has Omnicom Group performed over the past 5 years?

2.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OMC has high quality earnings.

Growing Profit Margin: OMC's current net profit margins (7.1%) are lower than last year (8.9%).


Past Earnings Growth Analysis

Earnings Trend: OMC's earnings have grown by 2% per year over the past 5 years.

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

Earnings vs Industry: OMC had negative earnings growth (-27.3%) over the past year, making it difficult to compare to the Media industry average (-12.2%).


Return on Equity

High ROE: Whilst OMC's Return on Equity (31.27%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Omnicom Group's financial position?


Financial Position Analysis

Short Term Liabilities: OMC's short term assets ($11.9B) do not cover its short term liabilities ($12.2B).

Long Term Liabilities: OMC's short term assets ($11.9B) exceed its long term liabilities ($8.3B).


Debt to Equity History and Analysis

Debt Level: OMC's debt to equity ratio (163.5%) is considered high.

Reducing Debt: OMC's debt to equity ratio has increased from 148.4% to 163.5% over the past 5 years.

Debt Coverage: OMC's debt is well covered by operating cash flow (26.2%).

Interest Coverage: OMC's interest payments on its debt are well covered by EBIT (14x coverage).


Balance Sheet


Next Steps

Dividend

What is Omnicom Group current dividend yield, its reliability and sustainability?

4.08%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OMC's dividend (4.08%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: OMC's dividend (4.08%) is low compared to the top 25% of dividend payers in the US market (4.14%).


Stability and Growth of Payments

Stable Dividend: OMC's dividends per share have been stable in the past 10 years.

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.4%), OMC's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OMC's dividends in 3 years are forecast to be well covered by earnings (48.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

John Wren (67 yo)

23.92yrs

Tenure

US$19,818,780

Compensation

Mr. John D. Wren is Chief Executive Officer since January 1997 and Chairman since May 2018 of Omnicom Group Inc. and was its President since 1996 until July 2018. Mr. Wren has been Director of Omnicom Grou...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD19.82M) is above average for companies of similar size in the US market ($USD10.98M).

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


Leadership Team

NamePositionTenureCompensationOwnership
John Wren
Chairman & CEO23.92yrsUS$19.82m0.48%
$ 65.1m
Jonathan Nelson
Founder & CEO of Omnicom Digitalno dataUS$5.36m0.011%
$ 1.4m
Philip Angelastro
Executive VP & CFO6.25yrsUS$7.57m0.14%
$ 19.5m
Michael O'Brien
Executive VPno dataUS$4.11m0.023%
$ 3.1m
Rochelle Tarlowe
Senior VP & Treasurer1.58yrsUS$1.13m0.00032%
$ 43.8k
Thomas Watson
Co-Founder & Vice Chairman Emeritusno datano datano data
Andrew Castellaneta
Senior VP & Chief Accounting Officer5.92yrsno data0.0084%
$ 1.2m
Craig Cuyar
Senior VP & Global Chief Information Officerno datano datano data
Shub Mukherjee
Vice President of Investor Relationsno datano datano data
Adrian Sapollnik
Executive Vice President of Strategy & Corporate Development0.33yrno datano data
Maeve Robinson
Senior VP of Finance & Assistant Treasurerno datano datano data
Katrin Grunmeier
Head of Phd Media Network - German Operations14.42yrsno datano data

6.1yrs

Average Tenure

56.5yo

Average Age

Experienced Management: OMC's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Wren
Chairman & CEO23.92yrsUS$19.82m0.48%
$ 65.1m
Thomas Watson
Co-Founder & Vice Chairman Emeritusno datano datano data
Charles Brymer
Chairman of DDB Worldwide2.83yrsUS$1.87mno data
Dale Adams
Chairman & CEO of Diversified Agency Services Division7.67yrsno datano data
Gracia Martore
Independent Director3.42yrsUS$281.00kno data
Keith Reinhard
Chairman Emeritus of DDB Worldwide14.67yrsUS$953.01kno data
Linda Rice
Independent Director20.92yrsUS$275.00k0.00037%
$ 50.6k
Mary Choksi
Independent Director9.42yrsUS$307.00kno data
Leonard Coleman
Lead Independent Director5yrsUS$344.00k0.0058%
$ 788.4k
Susan Denison
Independent Director23.92yrsUS$295.00k0.00073%
$ 99.9k
Keki Dadiseth
Non-Executive Chairman of India Operations14.33yrsno datano data
Deborah Kissire
Independent Director4.75yrsUS$285.00kno data

7.7yrs

Average Tenure

68yo

Average Age

Experienced Board: OMC's board of directors are considered experienced (7.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Omnicom Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Omnicom Group Inc.
  • Ticker: OMC
  • Exchange: NYSE
  • Founded:
  • Industry: Advertising
  • Sector: Media
  • Market Cap: US$13.687b
  • Shares outstanding: 214.97m
  • Website: https://www.omnicomgroup.com

Number of Employees


Location

  • Omnicom Group Inc.
  • 437 Madison Avenue
  • New York
  • New York
  • 10022
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OMCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
OCNDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969
0KBKLSE (London Stock Exchange)YesCommon StockGBUSDJan 1969
O1MC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services. It provides a range of services in the areas of advertising, customer relationshi...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 23:24
End of Day Share Price2020/12/02 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.