HOW TO PLAY IT

Forbes - - ENTREPRENEURS - BY KEL­LEY WRIGHT Kel­ley Wright is the man­ag­ing ed­i­tor of in­vest­ment Qual­ity Trends.

ad­ver­tis­ing is one of many in­dus­tries be­ing up­ended by the “FAANG ef­fect.” Many com­pa­nies are rad­i­cally al­ter­ing their ad ex­pen­di­tures as a re­sult. While that has hurt the stock of ad gi­ant om­ni­com group, whose sub­sidiaries in­clude BBDO, DDB and TBWA\Chiat\Day, its fi­nan­cial stats are healthy: ac­cord­ing to my es­ti­mates, re­turn on in­vested cap­i­tal is about 13%, and free cash flow yield is 5%. His­tor­i­cally om­ni­com has of­fered good value when the div­i­dend yield reaches 2.2%. based on the cur­rent cash div­i­dend of $2.40, a 2.2% div­i­dend yield would be re­al­ized at $109 per share. it re­cently closed around $75.

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