Contrasting WPP (WPP) & Interpublic Group of Companies (IPG)

Interpublic Group of Companies (NYSE: IPG) and WPP (NYSE:WPP) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for Interpublic Group of Companies and WPP, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interpublic Group of Companies 1 8 4 0 2.23
WPP 4 7 1 0 1.75



Interpublic Group of Companies presently has a consensus price target of $25.70, indicating a potential upside of 9.88%. Given Interpublic Group of Companies’ stronger consensus rating and higher probable upside, research analysts clearly believe Interpublic Group of Companies is more favorable than WPP.

Institutional & Insider Ownership

99.5% of Interpublic Group of Companies shares are owned by institutional investors. Comparatively, 5.3% of WPP shares are owned by institutional investors. 1.3% of Interpublic Group of Companies shares are owned by insiders. Comparatively, 1.0% of WPP shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Interpublic Group of Companies has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, WPP has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Profitability

This table compares Interpublic Group of Companies and WPP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interpublic Group of Companies 6.55% 26.05% 4.54%
WPP N/A N/A N/A

Dividends

Interpublic Group of Companies pays an annual dividend of $0.84 per share and has a dividend yield of 3.6%. WPP pays an annual dividend of $1.45 per share and has a dividend yield of 1.7%. Interpublic Group of Companies pays out 59.6% of its earnings in the form of a dividend. WPP pays out 18.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Interpublic Group of Companies has raised its dividend for 5 consecutive years. Interpublic Group of Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Interpublic Group of Companies and WPP’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Interpublic Group of Companies $7.88 billion 1.14 $579.00 million $1.41 16.59
WPP $19.67 billion 1.07 $2.34 billion $7.76 10.72

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

Summary

Interpublic Group of Companies beats WPP on 13 of the 17 factors compared between the two stocks.

Interpublic Group of Companies Company Profile

The Interpublic Group of Companies, Inc. provides advertising and marketing services worldwide. The company operates through two segments, Integrated Agency Networks and Constituency Management Group. It offers consumer advertising, digital marketing, communications planning and media buying, public relations, and specialized communications disciplines. The company also provides various diversified services, including public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting. It offers its services under various brands comprising McCann, MullenLowe, IPG Mediabrands, Carmichael Lynch, Deutsch, Hill Holliday, and The Martin Agency, as well as Foote, Cone & Belding. The company was formerly known as McCann-Erickson Incorporated and changed its name to The Interpublic Group of Companies, Inc. in January 1961. The Interpublic Group of Companies, Inc. was founded in 1902 and is headquartered in New York, New York.

WPP Company Profile

WPP plc provides various communications services worldwide. The company operates through four segments: Advertising and Media Investment Management; Data Investment Management; Public Relations & Public Affairs; and Branding & Identity, Healthcare and Specialist Communications. The Advertising and Media Investment Management segment provides advertising services; and media planning and buying, and specialist sponsorship, and branded entertainment services. The Data Investment Management segment offers brand, consumer, media, and marketplace insight services. The Public Relations & Public Affairs segment provides corporate, consumer, financial, and brand-building services. The Branding & Identity, Healthcare and Specialist Communications segment is involved in branding and identity; healthcare communications; and direct, digital, promotional, and relationship marketing activities. This segment also offers specialist communications services, such as custom media and multicultural marketing; event, sports, youth, and entertainment marketing; corporate and business-to-business; and media, technology, and production services. WPP plc was founded in 1985 and is based in London, the United Kingdom.

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