Does The Interpublic Group of Companies Deserve a Place in Your Portfolio?

NYSE: IPG | Interpublic Group of Cos. News, Ratings, and Charts

IPG – The shares of leading marketing solutions company The Interpublic Group of Companies (IPG) have rallied 55.1% in price year-to-date. The company has achieved solid top-line growth across all its segments due to increasing consumer demand for digital media solutions. Given the company’s solid fundamentals and its shares’ discounted valuation, we think it could be wise to add IPG to one’s portfolio now. Let’s discuss.

The Interpublic Group of Companies Inc. (IPG) is a values-driven, data-fueled, and creatively-driven marketing solutions provider. Home to some of the world’s best-known and innovative communications specialists, New York City-based IPG’s global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Huge, Initiative, Jack Morton, Kinesso, MAGNA, Matterkind, McCann, Mediahub, Momentum, MRM, MullenLowe Group, Octagon and more.

The company’s shares have gained 53.9% in price over the past year and 8.8% over the past six months to close yesterday’s trading session at $36.48.

With its continuing effort to offer superior products and services to its clients, the company maintains its leadership position in the industry. In addition, factors such as high connected device penetration, and a highly developed digital ecosystem supported by large media companies and ICT service providers, should further propel the company’s performance in the coming months.

Here is what could shape IPG’s performance in the near term:

Positive Developments

This month, IPG Mediabrands agreed with NewsGuard to expand its existing partnership to take responsible digital programmatic advertising to a pre-planning capacity and co-create the first-ever tool to evaluate and rate individual broadcast and cable news programs and networks. The new rankings will cover 117 shows across 27 networks and debut as an exclusive product for Mediabrands clients in spring 2022.

Also, this month, IPG’s agencies received seven of the eight Creative Excellence Awards and five of the nine Media Excellence Awards at the inaugural annual Campaign U.S. BIG Awards, establishing its position as an industry leader in creativity, media innovation, and client sectors.

Strong Financials and Profitability

During the third quarter, ended September 30, 2021, IPG’s total revenue increased 19.6% year-over-year to $2.54 billion. Its operating income grew 41.4% from its  year-ago value to $351.5 million. The company’s net income came in at $239.9 million, while its EPS amounted to $0.60.

IPG’s 16.5% trailing-12-months EBIT margin is 52.6% higher than the 10.8% industry average. Also, its ROC, net income margin, and ROA are 140%, 39.5%, and 32.5% higher than the respective industry averages. Furthermore, its $213 billion in cash from operations is 427.1% higher than the $404.22 million industry average .

Discounted Valuation

In terms of non-GAAP forward P/E, the stock is currently trading at 14.08x, which is 22% lower than the 18.05x industry average. Also, its 1.58x forward Price/Sales multiple is 9.8% lower than the 1.75x industry average. And IPG’s 1.86x forward EV/Sales is 23.6% lower than the 2.43x industry average.

The stock’s 11.04x forward EV/EBIT multiple is 32.4% lower than the 16.33x industry average.

Impressive Growth Prospects

The Street expects IPG’s revenues and EPS to rise 12.4% and 49.7%, respectively,  year-over-year to $9.07 billion and $2.59 in fiscal 2021. In addition, IPG’s EPS is expected to rise at a 17.4% CAGR over the next five years. Furthermore, the company has an impressive earnings surprise history; it topped the Street’s EPS estimates in all the trailing four quarters.

POWR Ratings Reflect Solid Prospects

IPG has an overall B grade, which equates to a Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. IPG has a B grade for Growth and Quality. The company’s solid growth attributes justify the Growth grade. In addition, IPG’s solid earnings and profitability are consistent with the Quality grade.

Of the 16 stocks in the Advertising industry, IPG is ranked #1.

Beyond what I have stated above, we have graded IPG for Stability, Sentiment, Value, and Momentum. Get all IPG ratings here.

Bottom Line

IPG is a leading marketing solutions provider with an impressive brand portfolio and an international market presence. Considering its solid fundamentals and impressive growth outlook, we believe the stock could be an excellent addition to one’s portfolio at the current price level.

How Does The Interpublic Group of Companies Inc. (IPG) Stack Up Against its Peers?

IPG has an overall grade of B in our proprietary rating system. This rating is superior to its peers in the Advertising industry – WPP plc American Depositary Shares (WPP), Omnicom Group Inc. (OMC), and Publicis Groupe (PUBGY), which have a C (Neutral) rating.


IPG shares were trading at $36.75 per share on Friday morning, up $0.27 (+0.74%). Year-to-date, IPG has gained 61.62%, versus a 26.80% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
IPGGet RatingGet RatingGet Rating
WPPGet RatingGet RatingGet Rating
OMCGet RatingGet RatingGet Rating
PUBGYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Interpublic Group of Cos. (IPG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All IPG News