Marchex (MCHX) vs. Omnicom Group (NYSE:OMC) Financial Review

Omnicom Group (NYSE: OMC) and Marchex (NASDAQ:MCHX) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Profitability

This table compares Omnicom Group and Marchex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Omnicom Group 7.61% 42.54% 5.22%
Marchex -15.53% -10.65% -9.44%

Analyst Recommendations

This is a summary of current ratings for Omnicom Group and Marchex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Omnicom Group 1 10 1 0 2.00
Marchex 0 1 0 0 2.00

Omnicom Group presently has a consensus target price of $85.36, indicating a potential upside of 11.21%. Marchex has a consensus target price of $3.00, indicating a potential upside of 2.39%. Given Omnicom Group’s higher possible upside, equities analysts plainly believe Omnicom Group is more favorable than Marchex.

Dividends

Omnicom Group pays an annual dividend of $2.20 per share and has a dividend yield of 2.9%. Marchex does not pay a dividend. Omnicom Group pays out 44.4% of its earnings in the form of a dividend. Omnicom Group has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Omnicom Group and Marchex’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Omnicom Group $15.41 billion 1.15 $2.32 billion $4.95 15.51
Marchex $105.54 million 1.06 -$12.35 million ($0.39) -7.51

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

Institutional & Insider Ownership

98.0% of Omnicom Group shares are owned by institutional investors. Comparatively, 51.8% of Marchex shares are owned by institutional investors. 1.1% of Omnicom Group shares are owned by company insiders. Comparatively, 27.4% of Marchex shares are owned by company 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 and Volatility

Omnicom Group has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Marchex has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Summary

Omnicom Group beats Marchex on 13 of the 15 factors compared between the two stocks.

Omnicom Group Company Profile

Omnicom Group Inc. is a holding company. The Company provides advertising, marketing and corporate communications services. The Company’s branded networks and agencies operate in all markets around the world and provide a range of services, which it groups into four disciplines: advertising, customer relationship management (CRM), public relations and specialty communications. The Company caters to various industry sectors, such as food and beverage, consumer products, pharmaceuticals and healthcare, financial services, technology, travel and entertainment, telecommunications and retail. The Company’s branded networks and agencies conduct business on a global basis and operate in the geographic regions, such as The Americas, which includes North America and Latin America; EMEA, which includes Europe, the Middle East and Africa, and Asia Pacific, which includes Australia, China, India, Japan, Korea, New Zealand, Singapore and other Asian countries.

Marchex Company Profile

Marchex, Inc. is a mobile advertising analytics company. The Company offers products and services for enterprises that depend on consumer phone calls to drive sales. Its media analytics products can provide actionable intelligence on media channels advertisers use to acquire customers over the phone. Its Marchex Omnichannel Analytics Cloud helps marketers connect customer conversions driven from paid media channels, including search, display and video, social and sites, to phone calls made to a business. Its product offerings include Marchex Call Analytics, Marchex Search Analytics, Marchex Display and Video Analytics, Marchex Social Analytics, Marchex Call Marketplace and Local Leads. Its Local Leads platform is a white-labeled, full service advertising solution for small business resellers, such as Yellow Pages providers and vertical marketing service providers, to sell call advertising, search marketing and other lead generation products.

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