Analyzing WPP (NASDAQ:WPP) & Omnicom Group (NYSE:OMC)

WPP (NASDAQ:WPPGet Rating) and Omnicom Group (NYSE:OMCGet Rating) are both large-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Institutional and Insider Ownership

4.0% of WPP shares are held by institutional investors. Comparatively, 90.9% of Omnicom Group shares are held by institutional investors. 1.0% of WPP shares are held by company insiders. Comparatively, 1.3% of Omnicom Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

WPP has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Omnicom Group has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for WPP and Omnicom Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WPP 0 0 0 0 N/A
Omnicom Group 4 5 5 0 2.07

Omnicom Group has a consensus price target of $84.60, suggesting a potential upside of 8.32%. Given Omnicom Group’s higher probable upside, analysts clearly believe Omnicom Group is more favorable than WPP.

Dividends

WPP pays an annual dividend of $1.81 per share and has a dividend yield of 3.5%. Omnicom Group pays an annual dividend of $2.80 per share and has a dividend yield of 3.6%. Omnicom Group pays out 44.9% of its earnings in the form of a dividend. Omnicom Group has increased its dividend for 1 consecutive years. Omnicom Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
WPP N/A N/A N/A
Omnicom Group 9.13% 40.82% 5.49%

Valuation & Earnings

This table compares WPP and Omnicom Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WPP $17.60 billion 0.64 $876.90 million N/A N/A
Omnicom Group $14.29 billion 1.11 $1.41 billion $6.23 12.54

Omnicom Group has lower revenue, but higher earnings than WPP.

Summary

Omnicom Group beats WPP on 11 of the 14 factors compared between the two stocks.

About WPP

(Get Rating)

WPP plc, a creative transformation company, provides communications, experience, commerce, and technology services in North America, the United Kingdom, Western Continental Europe, the Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. The company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies. It offers plans and creates marketing and branding campaigns; designs and produces advertisements across various media; and provides media buying services, such as strategy and business development, media investment, data and technology, and content. The company also offers public relations advisory services to clients who are seeking to communicate with a range of stakeholders from consumers to governments and the business and financial communities; and specialist agency services. WPP plc was founded in 1985 and is based in London, the United Kingdom.

About Omnicom Group

(Get Rating)

Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services. It provides a range of services in the areas of advertising, customer relationship management, public relations, and healthcare. The company's services include advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, entertainment marketing, experiential marketing, field marketing, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and in-store design services. Its services also comprise interactive marketing, investor relations, marketing research, media planning and buying, merchandising and point of sale, mobile marketing, multi-cultural marketing, non-profit marketing, organizational communications, package design, product placement, promotional marketing, public affairs, retail marketing, sales support, search engine marketing, shopper marketing, social media marketing, and sports and event marketing services. It operates in the United States, Canada, Puerto Rico, South America, Mexico, Europe, the Middle East, Africa, Australia, Greater China, India, Japan, Korea, New Zealand, Singapore, and other Asian countries. The company was incorporated in 1944 and is based in New York, New York.

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