Omnicom Group (NYSE: OMC) and Millennial Media (NYSE:MM) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Omnicom Group and Millennial Media, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Omnicom Group 1 10 1 0 2.00
Millennial Media 0 0 0 0 N/A

Omnicom Group currently has a consensus target price of $85.36, indicating a potential upside of 17.21%. Given Omnicom Group’s higher possible upside, research analysts plainly believe Omnicom Group is more favorable than Millennial Media.

Insider & Institutional Ownership

98.7% of Omnicom Group shares are owned by institutional investors. 1.1% of Omnicom Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Omnicom Group pays an annual dividend of $2.20 per share and has a dividend yield of 3.0%. Millennial Media does not pay a dividend. Omnicom Group pays out 44.4% of its earnings in the form of a dividend. Omnicom Group has increased its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Omnicom Group and Millennial Media’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Omnicom Group $15.41 billion 1.09 $2.32 billion $4.95 14.71
Millennial Media N/A N/A N/A N/A N/A

Omnicom Group has higher revenue and earnings than Millennial Media.

Profitability

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

Net Margins Return on Equity Return on Assets
Omnicom Group 7.61% 42.54% 5.22%
Millennial Media -23.47% -26.25% -19.24%

Summary

Omnicom Group beats Millennial Media on 10 of the 11 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 Millennial Media

Millennial Media, Inc. is an independent mobile advertising marketplace delivering products and services to advertisers and developers. The Company offers advertisers a suite of solutions that allow them to reach and connect with the target audiences across screens, from smartphones, tablets and other mobile devices to PCs. The Company offers developers the ability to maximize the advertising revenue and acquire new users for apps. Its advertiser and developer solutions support all mobile operating systems, including Apple iOS, Android, Windows Phone and BlackBerry. For clients who want a higher degree of customer service, the Company offers its managed media services with dedicated account teams. For its clients who want to interact with it on a more automated basis, the Company offers tools that allow advertisers to buy its ad supply in a programmatic fashion through its ad exchange and developers the opportunity to manage and monetize the ad inventory through its supply side tool.

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