Omnicom Group (NYSE: OMC) and Tremor Video (NYSE:TRMR) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for Omnicom Group and Tremor Video, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Omnicom Group 1 11 1 0 2.00
Tremor Video 0 1 2 0 2.67

Omnicom Group currently has a consensus target price of $85.55, suggesting a potential upside of 5.95%. Tremor Video has a consensus target price of $3.13, suggesting a potential upside of 38.89%. Given Tremor Video’s stronger consensus rating and higher possible upside, analysts plainly believe Tremor Video is more favorable than Omnicom Group.

Insider and Institutional Ownership

96.7% of Omnicom Group shares are held by institutional investors. Comparatively, 36.4% of Tremor Video shares are held by institutional investors. 1.1% of Omnicom Group shares are held by insiders. Comparatively, 8.2% of Tremor Video shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Omnicom Group and Tremor Video’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Omnicom Group $15.51 billion 1.21 $2.32 billion $4.91 16.44
Tremor Video $173.60 million 0.65 -$7.73 million ($0.33) -6.82

Omnicom Group has higher revenue and earnings than Tremor Video. Tremor Video is trading at a lower price-to-earnings ratio than Omnicom Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Omnicom Group pays an annual dividend of $2.20 per share and has a dividend yield of 2.7%. Tremor Video does not pay a dividend. Omnicom Group pays out 44.8% of its earnings in the form of a dividend. Tremor Video has increased its dividend for 7 consecutive years.

Volatility and Risk

Omnicom Group has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Tremor Video has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Profitability

This table compares Omnicom Group and Tremor Video’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Omnicom Group 7.54% 42.34% 5.27%
Tremor Video -9.64% -20.27% -11.42%

Summary

Omnicom Group beats Tremor Video on 9 of the 16 factors compared between the two stocks.

About Omnicom Group

Omnicom Group Inc. is a holding company. The Company provides advertising, marketing and corporate communications services. The Company’s branded networks and agencies operate in all markets around the world and provide a range of services, which it groups into four disciplines: advertising, customer relationship management (CRM), public relations and specialty communications. The Company caters to various industry sectors, such as food and beverage, consumer products, pharmaceuticals and healthcare, financial services, technology, travel and entertainment, telecommunications and retail. The Company’s branded networks and agencies conduct business on a global basis and operate in the geographic regions, such as The Americas, which includes North America and Latin America; EMEA, which includes Europe, the Middle East and Africa, and Asia Pacific, which includes Australia, China, India, Japan, Korea, New Zealand, Singapore and other Asian countries.

About Tremor Video

Tremor Video, Inc. is an advertising technology company. The Company provides software for video advertising effectiveness. The Company operates through online video advertising services segment. Its technology optimizes performance of video advertisement campaigns across all screens, including computers, smartphones, tablets and connected televisions. The Company’s buyer platform enables advertisers, agencies and other buyers of advertising to discover, buy, optimize and measure the effectiveness of their video advertisement campaigns. The Company’s technology analyzes video content, detects viewer and system attributes, and uses its repository of stored third-party data to optimize and target the delivery of advertisement campaigns. Its buyers can transact directly on its buyer platform through the Tremor Video DSP, a user interface that allows them to manage the execution of their campaigns on a programmatic basis. The Company also offers a seller platform, the Tremor Video SSP.

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