Why Omnicom Stock Has More to Offer

OMC is down 22% in the past month

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Omnicom Group Inc. (NYSE: OMC) is a global marketing and corporate communications company. Their branded networks and specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and other specialty communications services to over 5,000 clients in more than 70 countries. At last check, OMC is trading up 1.4% at $62.91.

Earlier this month, Omnicom Group announced a C-level shakeup! OMC appointed Matt McNally as CEO of Omnicom Health Group, the company’s healthcare marketing and communications network. McNally succeeded Ed Wise, who had held the chief executive role since OHG’s formation in 2016 and recently announced his retirement. McNally boasts over 25 years of leadership experience in the healthcare industry, previously serving as Global President of Dentsu Health.

Omnicom stock has decreased about 20% year-over-year and OMC is currently trading down 32% since peaking at $91.61 in early February. Additionally, shares of OMC have dropped 16% year-to-date and are down 22% over the past month.

OMC now offers a high dividend yield of 4.28% with a forward dividend of $2.80. Omnicom stock also provides a decent valuation at a forward price-earnings ratio of 10.65 and a price-sales ratio of 0.98, which is excellent for dividend investors despite the business’ lack of growth. Omnicom is expected to end fiscal 2022 with 0.3% revenue growth and 3.1% earnings growth. Nonetheless, expectations are slightly higher for fiscal 2023, with a 3.3% estimated increase in revenues and a 6.4% estimated increase in earnings, setting up Omnicom stock as a solid option for both dividend and value investors.

A shift in analyst attention could put the wind at the equity's back. Heading into today, four of the six covering brokerage firms sport a "hold" or worse recommendation.


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