Interested In Omnicom Group Inc (NYSE:OMC)’s Upcoming US$0.60 Dividend? You Have 2 Days Left

Important news for shareholders and potential investors in Omnicom Group Inc (NYSE:OMC): The dividend payment of US$0.60 per share will be distributed to shareholders on 10 October 2018, and the stock will begin trading ex-dividend at an earlier date, 20 September 2018. Should you diversify into Omnicom Group and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.

View our latest analysis for Omnicom Group

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it paying an annual yield above 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has the amount of dividend per share grown over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

NYSE:OMC Historical Dividend Yield September 17th 18

Does Omnicom Group pass our checks?

The current trailing twelve-month payout ratio for the stock is 47.2%, which means that the dividend is covered by earnings. Going forward, analysts expect OMC’s payout to remain around the same level at 43.8% of its earnings, which leads to a dividend yield of around 3.7%. In addition to this, EPS should increase to $5.62.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. In the case of OMC it has increased its DPS from $0.60 to $2.4 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.

In terms of its peers, Omnicom Group produces a yield of 3.5%, which is high for Media stocks but still below the market’s top dividend payers.

Next Steps:

Considering the dividend attributes we analyzed above, Omnicom Group is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three fundamental factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for OMC’s future growth? Take a look at our free research report of analyst consensus for OMC’s outlook.

2. Valuation: What is OMC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether OMC is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.