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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Omnicom Group Inc. (XNYS:OMC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
OMC
Name:
OMNICOM GROUP INC. (XNYS:OMC)
Sector:
- 567700.00K
Industry:
Advertising Agencies
CEO:
Mr. John Wren
Total Employees:
71,700
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 708.73% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF OMNICOM GROUP INC.(OMC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ADVERTISING AGENCIES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
66.26
One Month Price Target:
$66.58
Six Month Price Target :
$68.15
Likely Price in One Year's Time:
Ticker:
$70.04
Likely Trading Range Today Under (Normal Volatility)
$65.99
Price Upper limit ($) :
$66.53
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$63.03
This week:
$59.03
This month :
$51.8
Other Primary facts
Market Cap:
13.51B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
204.84M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.74%
-9.72%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$81.28
$74.45
$51.24
$58.07
Medium risk (<10%) entry points
Buy Call
Sell Call
$72.23
Buy Put:
Sell Put:
$70.77
$60.27
$61.75
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
OMC
Sharpe Ratio:
-0.41%
Comparison:
OMC, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -121.77% lower than the industry
& is -118.06% lower than the market/S&P 500 average
Average Returns/Yield of
OMC
Daily returns:
0.00%
Weekly returns:
0.00%
Monthly returns:
-0.02%
Yearly returns:
23.80%
Comparison of returns:
Average annual returns/yield (last 3 years) is -100.94% below industry average
Classification:
OMC, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.44
Statistical test of Returns:
OMC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.38%
Weekly Volatility:
5.31%
Monthly Volatility:
10.63%
Yearly Volatility:
36.81%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.60%
Volatility in last five trading days has been -74.58% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.88%
Weekly VaR:
-10.91%
Monthly VaR:
-21.83%
How Much Can the price of
OMC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-75.61%
This translates to price declining to:
$53.46
This translates to price declining to:
$16.16
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
OMC is a 54.06% riskier investment compared to the market/S&P 500 & is 31.98% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -38.86% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
OMC
Beta in relation to market/S&P 500--0.85
Expected beta in 1 year's time:
0.724
Expected beta in 3 year's time:
1.024
Unlevered (debt free) Beta:
0.324
Beta in relation to Nasdaq (XNAS):
0.647
Beta in relation to all global stocks::
0.734
Beta Comparison & Analysis
Beta of competitors/peers::
0.894
Beta is -4.91% lower than peers
Average Industry Beta:
1.076
Beta is -20.98% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.68%
Sustainable growth rate is -322.37% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.092
Alpha is -169.22% below industry average alpha yield
Alpha is -585% below the market average
Analysis of Cost of Capital of
OMC
Equity cost of capital:
0.090
Equity cost of capital is -14.70% below industry mean WACC
Unlevered (without debt) cost of capital:
3.42%
Before-tax cost of debt:
3.53%
After-tax cost of debt:
2.79%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.79%
WACC is -11.62% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$69.67
Revenue growth rate per share of (3Y):
3.43
Annual revenue growth rate is -84.55% below industry average
EPS:
$6.04
Expected Annual growth rate of EPS (3Y):
1.56%
Expected future EPS growth rate is -110.79% lower than the Advertising Agencies industry
Free cash flow (FCF) per share:
$5.63
Balance sheet equity growth per share: 14.29%
Equity growth rate per share is 26.52% higher than the industry
Debt per share
$32.20
EBITDA per share
$11.38
Valuation Analysis Today of
OMC
P/E Ratio:
11.11
P/E Ratio of Competitors/Peers:
21.06
P/E ratio is -47.24% lower than main peers & is -89.26% lower than the industry
Stock price/value with industry average P/E ratio: $625.22
OMC is -89.40% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $51.27
Present value of the expected future dividends only: $34.40
P/S (Price to Sales ratio):
0.95
Price to sales ratio is -72.95% below the industry mean
P/B (Price to book value ratio):
3.43
Price to free cash flow: 11.77
-
Net income growth rate (3Y):
20.31%
Net income growth rate is -157.35% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 10.58%
Dividend yeild: 4.23%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.80
Expected next dividend best case: $0.72
Expected next dividend worst case: $0.68
Average dividend payment (long-term): $0.68
Average dividend increase/decrease (growth rate) % per period: 0.77%
Expected next dividend payment date: 10/06/2022
Expected next dividend record date: 09/08/2022
-
Previous dividend payment date: 07/08/2022
Previous dividend record date: 06/10/2022
-
Dividend History:
2022-06-09--$0.70
2021-12-20--$0.70
2021-06-10--$0.70
2022-03-09--$0.70
2021-09-20--$0.70
2021-03-09--$0.70
Dividend growth rate is -49.96% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
219.91%
Net debt to equity ratio:
89.46%
Debt to assets ratio:
25.23%
Net debt to assets ratio:
10.26%
Debt-to-asset ratio is -57.12% below industry average
Ability to repay debt:
Interest coverage ratio:
10
Interest coverage ratio is 1015.91% more than industry average
Looking forward:
Debt growth rate:
-4.03%
Annual debt growth is -101% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.64
Statistical significance of correlation:
OMC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.498
Stock price is 28.36% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.498
Correlation of price movement with Nasdaq (^IXIC):
0.061
Covariance of price movement with the market:
0.085
Kurtosis
6.24
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.539
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
OMC
Gross Profit Margin Ratio:
76%
Operating Profit Margin Ratio:
14.61%
Operating profit margin is -13.03% lower than the industry
Net Profit Margin Ratio:
76%
Effective Tax Rate:
26.14%
Effective tax rate is -44.49% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
46.44%
Return on equity (ROE) is -645.84% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.33%
Return on assets (ROA) is -100.76% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
0.95
Current ratio is -64.02% below industry average
Cash Conversion Cycle (days):
-161.2
Cash conversion cycle is -211.73% below industry average
The remaining useful life of property plant & equipment is: 9.6 years
Stock based compensation to net income ratio:
1.44%
In-depth Efficiency Analysis
Revenue generated per employee:
199.1K
Each employee generates -44% less revenue than industry average revenue per employee
EBITDA generated per employee:
32.5K
Each employee generates -61% less EBITDA than industry average revenue per employee
Profit generated per employee:
19.4K
Each employee generates -44% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 7.9K
Each employee generates -20% less free cash flow than industry average revenue per employee
Assets/Capital per employee
177.8K
Each employee generates -20% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
OMC
WPP PLC (XNYS:WPP)
Shaw Communications Inc. (XNYS:SJR)
THE INTERPUBLIC GROUP OF COMPANIES, INC. (XNYS:IPG)
Telefonica Brasil SA (XNYS:VIV)
PINTEREST, INC. (XNYS:PINS)
AMC ENTERTAINMENT HOLDINGS, INC. (XNYS:AMC)
TENCENT MUSIC ENTERTAINMENT GROUP (XNYS:TME)
Just Eat Takeaway.com NV (OTCM:JTKWY)
SK TELECOM CO.,LTD (XNYS:SKM)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�38%
Sell�13%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
14.27B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
11.57B
2.70B
-
-
404.70M
-
1.30M
406.00M
28.90M
233.20M
213.90M
2.33B
2.09B
1.39B
1.88B
491.60M
1.39B
Statement of Cash Flow
Date:
Period:
55.20M
Differed Income Tax :
-
Stock Based Compensation :
20.00M
Change in Working Capital :
- 884200.00K
Accounts Receivables:
1.14B
Other Working Capital:
- 22900.00K
Other Non-Cash Items:
69.90M
Net Cash Provided by Operating Activities:
- 544500.00K
Investments in PP&E:
-
Net Acquisitions:
- 246600.00K
Purchases of Investments:
- 92700.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.93B
92.70M
4.02B
7.07B
1.32B
990.90M
13.40B
2.17B
9.95B
333.00M
77.60M
-
210.80M
12.75B
-
26.15B
9.90B
12.40M
328.50M
1.46B
2.80B
14.18B
6.60B
960.00M
8.01B
-
22.19B
44.60M
9.03B
- 1222600.0K
- 4849600.00K
March 31, 2022 at 6:00:00 AM
11.97B
3.00B
25.19B
170.30M
6.61B
2.7B
-
- 22500.00K
- 361800.00K
-
-
- 300300.00K
- 147400.00K
- 28600.00K
- 476300.00K
- 8700.00K
- 1391300.00K
3.93B
5.32B
- 544500.00K
- 23200.00K
- 567700.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
OMC
2023
2024
2025
2026
2027
$70.39
$98.44
$104.06
$110.01
$116.29