Ticker: IPG, Buy below $24.
Why I Would Buy
- Cheap– Interpublic trades at less than 14 times forward earnings and 1.1 revenues.
- RoE – Return-on-Equity is my favorite metric, IPG has maintained double digit returns on equity for the past decade.
- Dividend – Currently yields over 3%.
- Contrarianism – IPG is near a 52 week low.
What Could Go Wrong
- High Beta – Advertising and media spend are strongly correlated to global economy, and is first spending to be cut in a downturn.
- High Payout – Payout ratio has been steadily climbing, and is nearing 50% of earnings.
Disclosure: I am long IPG, please read additional disclosures here before taking any action based on this post.