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5 Reasons Why You Should Invest in Interpublic (IPG) Now

A prudent investment decision involves buying well-performing stocks at the right time while selling those that are at risk. Rise in share price and strong fundamentals signal a stock's bullish run.

The Interpublic Group of Companies, Inc . IPG is an advertising and marketing stock that has performed well so far this year and has the potential to sustain the momentum in the near term. Consequently, if you haven't taken advantage of its share price appreciation yet, it's time you add the stock to your portfolio.

What Makesitan Attractive Pick?

An Outperformer: A glimpse at the company's price trend reveals that the stock has had an impressive run on the bourses, on a year-to-date basis. Shares of Interpublic have returned 19.2% year-to-date, compared with the 16.3% decline of the industry it belongs to and 2.2% rise of the Zacks S&P 500 Composite Index.

Solid Zacks Rank: Interpublic currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.

You can see the complete list of today's Zacks #1 Rank stocks here.

Northward Estimate Revisions: The direction of earnings estimate revisions serves as an important pointer when it comes to the price of a stock. Over the last 60 days, the Zacks Consensus Estimate for the current quarter earnings moved up 1.3%. For 2018 and 2019, estimates moved up 1.2% and 1.7%, respectively.

Strong Growth Prospects: The Zacks Consensus Estimate for current quarter earnings is pegged at 81 cents, indicating year-over-year growth of 2.5%. Moreover, earnings are expected to register 23.4% growth in 2018 and 5.5% in 2019.

Driving Factors: Interpublic's digital capabilities, diversified business model and geographic reach offer a distinctive competitive advantage. The company is expected to achieve targeted levels in the coming quarters, based on diversification across emerging regions and collaboration/integration across agencies through technological improvement. It continues to look for investments/acquisitions to expand in high-growth regions and key global markets.

Further, the company looks strong on the back of higher organic revenue growth. In the first nine months of 2018, organic revenue growth was 4.9%, which was primarily a result of net client wins and higher spending from existing clients. In terms of geography, organic growth was 4.6% in the United States and 5.4% in international markets.

Additionally, acquisitions have been acting as key growth catalyst for Interpublic. It has been continuously acquiring and investing in companies globally to expand its product portfolio, thereby trying to adapt to rapidly changing marketing services and the media market. So far this year, the company has completed three acquisitions - data-related and analytical services provider, Acxiom LLC in October; London-based social creative agency That Lot through its subsidiary, Weber Shandwick in July; and Brazil-based digital marketing and technology agency, Cappuccino in May.

Other Stocks to Consider

A few other top-ranked stocks in the broader Business Services sector are Paychex, Inc PAYX , WEX Inc WEX and Automatic Data Processing Inc. ADP , each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rates for Paychex, WEX and Automatic Data Processing are 8.5%, 15% and 12.5%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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