Interpublic Group of Companies, Inc. (The) (NYSE: IPG) and Omnicom Group (NYSE:OMC) are both large-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitabiliy.

Analyst Ratings

This is a summary of current ratings and recommmendations for Interpublic Group of Companies, Inc. (The) and Omnicom Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interpublic Group of Companies, Inc. (The) 1 4 9 0 2.57
Omnicom Group 1 10 1 0 2.00

Interpublic Group of Companies, Inc. (The) currently has a consensus price target of $26.92, suggesting a potential upside of 5.27%. Omnicom Group has a consensus price target of $85.36, suggesting a potential upside of 3.95%. Given Interpublic Group of Companies, Inc. (The)’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Interpublic Group of Companies, Inc. (The) is more favorable than Omnicom Group.

Risk & Volatility

Interpublic Group of Companies, Inc. (The) has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Omnicom Group has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Dividends

Interpublic Group of Companies, Inc. (The) pays an annual dividend of $0.72 per share and has a dividend yield of 2.8%. Omnicom Group pays an annual dividend of $2.20 per share and has a dividend yield of 2.7%. Interpublic Group of Companies, Inc. (The) pays out 47.1% of its earnings in the form of a dividend. Omnicom Group pays out 44.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Interpublic Group of Companies, Inc. (The) has raised its dividend for 7 consecutive years and Omnicom Group has raised its dividend for 4 consecutive years. Interpublic Group of Companies, Inc. (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

98.3% of Interpublic Group of Companies, Inc. (The) shares are held by institutional investors. Comparatively, 97.7% of Omnicom Group shares are held by institutional investors. 1.5% of Interpublic Group of Companies, Inc. (The) shares are held by company insiders. Comparatively, 1.1% of Omnicom Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Interpublic Group of Companies, Inc. (The) and Omnicom Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Interpublic Group of Companies, Inc. (The) $7.86 billion 1.29 $1.11 billion $1.53 16.71
Omnicom Group $15.41 billion 1.24 $2.32 billion $4.95 16.59

Omnicom Group has higher revenue and earnings than Interpublic Group of Companies, Inc. (The). Omnicom Group is trading at a lower price-to-earnings ratio than Interpublic Group of Companies, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Interpublic Group of Companies, Inc. (The) and Omnicom Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interpublic Group of Companies, Inc. (The) 7.95% 29.00% 4.90%
Omnicom Group 7.61% 42.54% 5.22%

Summary

Interpublic Group of Companies, Inc. (The) beats Omnicom Group on 11 of the 17 factors compared between the two stocks.

Interpublic Group of Companies, Inc. (The) Company Profile

The Interpublic Group of Companies, Inc. is a global advertising and marketing services company. The Company specializes in consumer advertising, digital marketing, communications planning and media buying, public relations and specialized communications disciplines. It operates in two segments: Integrated Agency Networks (IAN) and Constituency Management Group (CMG). Its agencies offer customized marketing programs for clients that range in scale from global marketers to regional and local clients. IAN consists of McCann Worldgroup, FCB, MullenLowe Group, IPG Mediabrands, its digital specialist agencies and its domestic integrated agencies. CMG consists of its specialist marketing services offerings. It has three global networks: McCann Worldgroup, Foote, Cone & Belding and MullenLowe Group, which provide integrated, advertising and marketing solutions for clients. Its global media services companies include UM and Initiative, which operate under the IPG Mediabrands umbrella.

Omnicom Group Company Profile

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.

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