Analyzing Omnicom Group (OMC) and MDC Partners (MDCA)

Omnicom Group (NYSE: OMC) and MDC Partners (NASDAQ:MDCA) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Omnicom Group and MDC Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Omnicom Group $15.41 billion 1.16 $2.32 billion $4.95 15.71
MDC Partners $1.47 billion 0.41 $150.77 million ($0.56) -19.11

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Omnicom Group has higher revenue and earnings than MDC Partners. MDC Partners is trading at a lower price-to-earnings ratio than Omnicom Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Omnicom Group has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, MDC Partners has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Dividends

Omnicom Group pays an annual dividend of $2.20 per share and has a dividend yield of 2.8%. MDC Partners does not pay a dividend. Omnicom Group pays out 44.4% of its earnings in the form of a dividend. Omnicom Group has raised its dividend for 7 consecutive years.

Profitability

This table compares Omnicom Group and MDC Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Omnicom Group 7.61% 42.54% 5.22%
MDC Partners -1.70% -5.66% 1.78%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Omnicom Group and MDC Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Omnicom Group 1 10 1 0 2.00
MDC Partners 0 4 3 0 2.43

Omnicom Group currently has a consensus target price of $85.36, suggesting a potential upside of 9.79%. MDC Partners has a consensus target price of $12.17, suggesting a potential upside of 13.71%. Given MDC Partners’ stronger consensus rating and higher possible upside, analysts clearly believe MDC Partners is more favorable than Omnicom Group.

Institutional & Insider Ownership

98.7% of Omnicom Group shares are owned by institutional investors. Comparatively, 86.3% of MDC Partners shares are owned by institutional investors. 1.1% of Omnicom Group shares are owned by company insiders. Comparatively, 3.4% of MDC Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Omnicom Group beats MDC Partners on 10 of the 17 factors compared between the two stocks.

About Omnicom Group

Omnicom Group Inc. is a holding company. The Company provides advertising, marketing and corporate communications services. The Company’s branded networks and agencies operate in all markets around the world and provide a range of services, which it groups into four disciplines: advertising, customer relationship management (CRM), public relations and specialty communications. The Company caters to various industry sectors, such as food and beverage, consumer products, pharmaceuticals and healthcare, financial services, technology, travel and entertainment, telecommunications and retail. The Company’s branded networks and agencies conduct business on a global basis and operate in the geographic regions, such as The Americas, which includes North America and Latin America; EMEA, which includes Europe, the Middle East and Africa, and Asia Pacific, which includes Australia, China, India, Japan, Korea, New Zealand, Singapore and other Asian countries.

About MDC Partners

MDC Partners Inc. is a provider of global marketing, advertising, activation, communications and strategic consulting solutions. The Company and its subsidiary agencies (Partner Firms) deliver a range of customized services. The Company’s segments include Reportable Segment, All Other and Corporate. The Reportable segment consists of the Company’s integrated advertising, media and public relations service companies. The All Other segment consists of the companies that provide the Company’s specialist marketing offerings, such as direct marketing, sales promotion, market research, strategic communications, database and customer relationship management, data analytics and insights, corporate identity, and design and branding. The Reportable segment includes the operations of various companies, such as Allison & Partners, Anomaly, Crispin Porter + Bogusky, Doner, Forsman & Bodenfors, Hunter PR, kbs, MDC Media Partners and 72andSunny.

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