Omnicom Group (
), the biggest U.S. advertising company, is seeing profits
improve as the global economy continues to grow.
The New York City-based firm has reported two straight
quarters of accelerating profit increases, to 10% in the latest
quarter. Profit for the current quarter is expected to pick up
further, rising 11% to 91 cents a share.
Revenue has also been on the upswing, rising 2%, 3%, 3% and 6%
in the past four quarters. Sales for the current quarter are
again expected to rise 6%, to $3.7 billion.
Omnicom's global ad agencies include BBDO Worldwide, TBWA
Worldwide and DDB Worldwide. It also offers public relations
services through agencies such as Ketchum and
Omnicom is benefiting from steady growth in Asia, Latin
America and the United States, where the company generates most
of its revenue.Procter & Gamble (
) andJohnson & Johnson (
) are among the ad firm's biggest clients.
The stock cleared a 73.77 buy point of a saucer-with-handle
base in heavy volume on July 25, after its better-than-expected
quarterly results. However, it quickly pulled back to its 10-week
line and is now just below the entry.
Like many large-cap companies, Omnicom's earnings have been
remarkably stable. It has a three-year Earnings Stability Factor
of 1 on a scale of 0 (most stable) to 99 (most volatile). Profit
this year is seen rising 8% to $4.18 a share, followed by an 11%
increase in 2015. That's in line with the three-year EPS growth
rate of 9%.
Meanwhile, Omnicom has increased its dividend for five
straight years after holding the payout steady through the
2008-09 recession. The company in May boosted its quarterly
payout by 10 cents, or 25%, to 50 cents a share. The total annual
payout of $2.00 a share yields 2.8% at the current share price,
well above the S&P 500 average of 1.88%.