A prudent investment decision involves buying well-performing stocks at the right time and selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bull run.
The Interpublic Group of Companies, Inc. IPG is a marketing and advertising services provider that has performed well so far this year and has the potential to sustain the momentum in the near term. If you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Interpublic an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that its shares have gained 8.1% year to date compared with 5.9% rise of the industry it belongs to.
Solid Rank & VGM Score: Interpublic currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, the company seems to be an appropriate 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. The Zacks Consensus Estimate for Interpublic’s 2019 earnings has moved up 2.2% in the past 90 days.
Strong Growth Prospects: The Zacks Consensus Estimate for first-quarter 2019 earnings is pegged at 6 cents per share, indicating year-over-year growth of more than 100%. Moreover, earnings are expected to register 0.5% growth in 2019 and 4.9% in 2020. The stock has an expected long-term (three to five years) earnings per share growth rate of 2.7%.
Driving Factors: Interpublic’s digital capabilities, diversified business model and geographic reach provide it a distinctive competitive advantage. The company is expected to achieve targeted levels in the upcoming 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.
The company’s top line continues to grow organically driven by growth across major geographic regions and contributions from net client wins and net higher spending from existing clients (especially in the healthcare sector). In 2018, the company witnessed organic net revenue growth of 5.5%. Growth was 5.1% in the United States and 6.2% in international markets. This marks an improvement from organic net revenue increase of 1.5% in 2017, which includes 1.9% growth in the United States and 1.1% in international markets. For 2019, the company expects organic revenue growth of 2-3%.
Interpublic has been continuously acquiring and investing in companies globally to expand its product portfolio and adapt to rapidly changing marketing services and the media market. In 2018, the company completed three acquisitions. These include the buyout of 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. Full-year 2018 revenues include $181.7 million in relation to the Acxiom acquisition and a positive impact of 1.8% from net acquisitions.
Other Stocks to Consider
A few other top-ranked stocks in the broader Zacks Business Services sector are Broadridge BR, Automatic Data Processing ADP and Copart CPRT, each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for Broadridge, Automatic Data Processing and Copart is 10%, 13% and 20%, respectively.
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Interpublic Group of Companies, Inc. (The) (IPG) : Free Stock Analysis Report
Copart, Inc. (CPRT) : Free Stock Analysis Report
Broadridge Financial Solutions, Inc. (BR) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
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