Critical Comparison: Omnicom Group (NYSE:OMC) versus SPAR Group (NASDAQ:SGRP)

SPAR Group (NASDAQ:SGRP) and Omnicom Group (NYSE:OMC) are both communication services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Risk & Volatility

SPAR Group has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Omnicom Group has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Institutional and Insider Ownership

9.6% of SPAR Group shares are owned by institutional investors. Comparatively, 92.0% of Omnicom Group shares are owned by institutional investors. 43.0% of SPAR Group shares are owned by company insiders. Comparatively, 1.2% of Omnicom Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SPAR Group and Omnicom Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SPAR Group	1	0	0	0	1.00
Omnicom Group	2	5	4	0	2.18

Omnicom Group has a consensus price target of $99.00, indicating a potential upside of 31.80%. Given Omnicom Group’s stronger consensus rating and higher possible upside, analysts plainly believe Omnicom Group is more favorable than SPAR Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SPAR Group	-18.51%	-107.74%	-19.90%
Omnicom Group	1.74%	24.73%	5.15%

Valuation & Earnings

This table compares SPAR Group and Omnicom Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SPAR Group	$132.58 million	0.15	-$24.63 million	($1.01)	-0.68
Omnicom Group	$17.27 billion	1.19	-$54.50 million	$1.16	64.75

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

Summary

Omnicom Group beats SPAR Group on 12 of the 14 factors compared between the two stocks.

About SPAR Group

SPAR Group, Inc., together with its subsidiaries, provides merchandising and brand marketing services in the Americas, the Asia-Pacific, Europe, Middle East, and Africa. The company offers merchandising and marketing services, such as resets and cut-ins; price and inventory audits; stock replenishment and rotation services; out of stock management; promotional event setup; and display management, as well as category management and set up services comprising category and product resets; planogram maintenance; display and shelf services; and point of purchase installation and management. It also provides remodel and retail transformation consisting of store remodels, store department resets, fixture and banner installations, pop-up store services, and store closings; and assembly and installation services, including assembly of merchandise in stores, in-store services, office setup/down-sizing services, and national in-home furniture assembly services. In addition, the company offers business analytics and insights services, such as product dashboards, stock out reporting, visit reporting, real-time service insights, and share of shelf analytics; and fulfillment and distribution services comprising distribution center staffing, point of purchase fulfillment services, kiosk prep, returns processing, picking and packing services, and inventory services. The company serves mass merchandisers; HBAs; pharmacies; and grocery, discount, dollar, convenience, cash and carry, home improvement, consumer electronics, automotive aftermarket, office supply, personal technology, beverage, household products, consumables, financial products, and independent stores. SPAR Group, Inc. was founded in 1967 and is headquartered in Auburn Hills, Michigan.

About Omnicom Group

Omnicom Group Inc., together with its subsidiaries, offers advertising, marketing, and corporate communications services. It provides a range of services in the areas of advertising and media, precision marketing, commerce and branding, experiential, execution and support, public relations, and healthcare. The company's services include advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing and post-production, digital transformation consulting, entertainment marketing, experiential marketing, field marketing, sales support, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and instore design services. Its services also comprise interactive marketing, investor relations, marketing research, media planning and buying, retail media planning and buying, merchandising and point of sale, mobile marketing, multi-cultural marketing, non-profit marketing, organizational communications, package design, product placement, promotional marketing, public affairs, public relations, retail marketing, retail media and e-commerce, search engine marketing, shopper marketing, social media marketing, and sports and event marketing services. It operates in the North and Latin America, Europe, the Middle East and Africa (EMEA), and the Asia Pacific. The company was incorporated in 1944 and is based in New York, New York.