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Here's Why You Should Retain Omnicom (OMC) in Portfolio Now

Omnicom Group Inc. OMC currently benefits from its shareholder-friendly measures and prudent investments. The stock gained 2% in the past month compared with 3.1% decline of the industry it belongs to.

Factors That Bode Well

Omnicom continues to focus on investing in high-growth areas related to technology and data. Such moves are helping the company improve the quality of service to its clients. Driven by such positives, we expect OMC to witness higher revenues on the back of its organic growth.

Omnicom has a consistent record of returning value to its shareholders in the form of dividends and share repurchases. In 2021, OMC paid out dividends worth $592.3 million and repurchased shares amounting to $527.3 million.

OMC paid out $562.7 million in dividends and bought back shares worth $222 million in 2020. In 2019, Omnicom paid out $564.3 million in dividends and repurchased shares worth $610.2 million. Such moves instill investors’ confidence in the stock and drive its earnings per share.

Some Risks

Omnicom's current ratio at the end of the March quarter was pegged at 0.95, lower than the current ratio of 0.98 reported at the end of the December quarter and the prior-year quarter’s 1.02. Decreasing current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.

Zacks Rank & Stocks to Consider

Omnicom currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Business Services sector can consider stocks like Avis Budget Group, Inc. CAR, Genpact Limited G and CRA International, Inc. CRAI.

Avis Budget sports a Zacks Rank #1 (Strong Buy) at present. CAR has a long-term earnings growth expectation of 19.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average. 

Genpact sports a Zacks Rank of 1 at present. G has a long-term earnings growth expectation of 12.3%.

Genpact delivered a trailing four-quarter earnings surprise of 13.3%, on average. 

CRA International carries a Zacks Rank #2 (Buy), currently. CRAI has a long-term earnings growth expectation of 14.3%.

CRAI delivered a trailing four-quarter earnings surprise of 35.8%, on average.


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Charles River Associates (CRAI): Free Stock Analysis Report
 
Avis Budget Group, Inc. (CAR): Free Stock Analysis Report
 
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