Omnicom Group (NYSE:OMC) Announces Earnings Results

Key Points

• Omnicom beat expectations with Q EPS of $1.90 versus a $1.87 consensus and revenue of $6.24 billion versus $5.61 billion expected.
• The company pays a quarterly dividend of $0.80 (annualized $3.20, yield 4.2%) but shows an unusually high dividend payout ratio of 653.06%, and its board authorized a $5.0 billion share buyback (up to 38.1% of shares).
• Shares traded near $76.92 with a market cap of $21.9B and a high trailing PE of 156.98; analysts' consensus is a "Hold" with a target of $95.86, though several firms have raised targets into the $108–$115 range.

Omnicom Group (NYSE:OMC - Get Free Report) issued its earnings results on Tuesday. The business services provider reported $1.90 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.87 by $0.03, FiscalAI reports. Omnicom Group had a negative net margin of 0.32% and a positive return on equity of 25.65%. The business had revenue of $6.24 billion during the quarter, compared to analysts' expectations of $5.61 billion.

Omnicom Group Stock Performance

Omnicom Group stock traded up $0.91 during mid-day trading on Tuesday, reaching $76.92. 6,621,611 shares of the stock traded hands, compared to its average volume of 4,892,109. Omnicom Group has a 12-month low of $66.33 and a 12-month high of $87.17. The business's 50-day moving average is $78.16 and its 200-day moving average is $76.82. The company has a debt-to-equity ratio of 0.60, a current ratio of 0.93 and a quick ratio of 0.81. The stock has a market capitalization of $21.92 billion, a PE ratio of 156.98, a price-to-earnings-growth ratio of 0.58 and a beta of 0.73.

Omnicom Group Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, April 9th. Stockholders of record on Wednesday, March 11th were paid a $0.80 dividend. This represents a $3.20 dividend on an annualized basis and a dividend yield of 4.2%. The ex-dividend date was Wednesday, March 11th. Omnicom Group's dividend payout ratio (DPR) is 653.06%.

Hedge Funds Weigh In On Omnicom Group

Institutional investors have recently made changes to their positions in the business. EverSource Wealth Advisors LLC increased its holdings in Omnicom Group by 82.9% during the second quarter. EverSource Wealth Advisors LLC now owns 1,917 shares of the business services provider's stock valued at $138,000 after buying an additional 869 shares during the last quarter. Gamco Investors INC. ET AL bought a new stake in shares of Omnicom Group during the 2nd quarter valued at $241,000. Gabelli Funds LLC purchased a new stake in shares of Omnicom Group in the 2nd quarter worth $1,061,000. Daiwa Securities Group Inc. raised its holdings in Omnicom Group by 5.3% in the 2nd quarter. Daiwa Securities Group Inc. now owns 29,373 shares of the business services provider's stock worth $2,113,000 after purchasing an additional 1,482 shares during the period. Finally, Sei Investments Co. grew its holdings in Omnicom Group by 14.1% during the second quarter. Sei Investments Co. now owns 361,266 shares of the business services provider's stock valued at $25,990,000 after purchasing an additional 44,746 shares during the period. Institutional investors own 91.97% of the company's stock.

Analysts Set New Price Targets

A number of equities analysts recently weighed in on the stock. Argus upgraded shares of Omnicom Group to a "hold" rating in a report on Thursday, March 26th. UBS Group increased their target price on Omnicom Group from $108.00 to $114.00 and gave the company a "buy" rating in a research note on Friday, March 20th. Citigroup lifted their target price on Omnicom Group from $103.00 to $115.00 and gave the stock a "buy" rating in a report on Friday, February 20th. Bank of America restated an "underperform" rating and issued a $77.00 price target (down from $87.00) on shares of Omnicom Group in a research note on Monday, January 5th. Finally, Barclays upped their price target on Omnicom Group from $82.00 to $90.00 and gave the company an "equal weight" rating in a report on Monday, February 23rd. Four investment analysts have rated the stock with a Buy rating, four have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, Omnicom Group currently has an average rating of "Hold" and a consensus target price of $95.86.

Omnicom Group announced that its Board of Directors has approved a stock buyback program on Wednesday, February 18th that permits the company to repurchase $5.00 billion in shares. This repurchase authorization permits the business services provider to reacquire up to 38.1% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company's board of directors believes its stock is undervalued.

Omnicom Group Company Profile

Omnicom Group Inc NYSE: OMC is a global marketing and corporate communications holding company headquartered in New York City. Founded in 1986 through the merger of the BBDO, DDB and Needham Harper agencies, Omnicom has built a portfolio of leading brands and networks serving clients across diverse industries.

The company's primary business activities encompass advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and customer relationship management.

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