Omnicom Group, Inc. (OMC) is a global advertising and marketing services company, and one of the world’s largest corporate communications companies, explains Kelley Wright, dividend investing expert and editor of Investment Quality Trends.
The company has quite a reach, serving more than 5,000 clients in over 100 countries. Operationally, OMC is three independent global agency networks: the BBDO Worldwide Network; the DDB Worldwide Network; and the TBWA Worldwide Network. Each agency network has its own clients, and the networks compete against each other in the same markets.
Under the hood as we call it, OMC has strong cash flow with Return on Invested Capital and Free Cash Flow Yield of 14.70% and 12.30% respectively.
The stock also sports the IQ Trends “G” designation for outstanding dividend growth of at least a 10% annual increase over the last 12 years. Why the market has this stock priced as if there will be no profit growth is astounding.
Historically, Omnicom Group is Undervalued at a dividend yield of 3.60%, which based on the current dividend of $2.80 equates to $78 per share. Trading recently around $73 per share, the stock offers excellent good value.