When it comes to buying stocks, investors are always on the lookout for a bargain. Sometimes the best bargains may be found by looking at solid companies whose share prices have taken a significant dip. It is imperative, however, that the company still have solid fundamentals and a strong business. Interpublic Group could potentially represent
A Solid Business
Interpublic Group is the fourth-largest advertising agency be revenue in the world. The company has offices in over 100 countries around the globe, giving it “boots on the ground” to provide its clients with customized marketing and advertising solutions. The company serves some of the largest companies in the world, and the consistent need for marketing and advertising expertise may put it into a solid position to keep its growth trajectory moving in the right direction. The company has also completed an important acquisition in 2018 that could provide it with a competitive edge in data-driven marketing.
Shares Have Declined
Shares of Interpublic Group have dropped over 5% in the last 12 months and could potentially be at an attractive level for patient investors. Of course, a lower stock price may potentially provide a better value if the long-term outlook for the company is positive. Despite the recent declines in the stock price, the company is continuing to grow both organically and inorganically and if it can maintain positive growth and increase profits, the stock price could potentially rise substantially in the long run. A higher stock price could potentially give investors a one-two punch of earnings through both price appreciation and dividends.
An Attractive Dividend
Interpublic Group pays an annual dividend and shares currently yield about 4% at current prices. If the company is able to increase operating margins in the years ahead, it could potentially not only see a significant rise in the stock price but it could also raise the dividend paid to investors. At the current rate, any further declines in the stock price will increase the dividend yield potentially providing newer investors with a higher income. Of course, if the stock price declines enough, the company could look to cut or even eliminate payments to investors if it deems such a move necessary.
The Importance of Dividends
Dividends give investors another way to earn a return. Companies that pay dividends compensate their investors through cash payments or additional stock. These payments may be made monthly, quarterly or annually. Sometimes, companies may offer a special dividend that is separate or in addition to regular payments.
Larger, established companies with stable businesses and cash flows often pay dividends. These payments are essentially a way for companies to share their profits with investors. These types of companies can potentially make great long-term investments due to their stability and income potential. Although a rising stock price is usually something to cheer about, dividend investors do not require a higher stock price to earn income from the stock.