My Snapshot of the Week gives you a short summary of a stock that currently looks particularly interesting to me.
This week’s focus: British advertising group WPP.
My Stock Screener
I use my own stock screener to identify companies that perfectly fit my investment strategy. It determines the attractiveness of a stock based on 4 assessment criteria and finally leads to my personal screening result, which I call Dividend Diary Score.
More information about my stock screening process can be found here:
Companies with a Dividend Diary Score of
- less than -10 rarely make it on my watchlist
- between -10 and +10 qualify itself for my stock screener
- higher than +10 probably end up in my portfolio.
WPP in my Stock Screener
WPP currently scores a positive Dividend Diary Score of +27.3 points.
This very high Dividend Diary Score is the result of a particularly low stock price.
However, WPP also scores well because of its strong earnings growth and its robust earnings trend.
In addition, the British advertising group steadily increased its dividend. The only exception is 2018, when the dividend was left unchanged.
Meanwhile, WPP’s stock yields 7.2%. Nevertheless, the payout ratio is still only slightly above 50%.
Conclusion: WPP is a Buy Candidate
With a Dividend Diary Score of 27.3 bonus points, WPP is a clear buy candidate from a quantitative point of view.
However, from a qualitative point of view, I’m not only worried about the major upheavals across the advertising industry (e.g. competition from IT giants like Google and Facebook and the big management consultancies), but also about the departure of ex-boss and founder Martin Sorrell.
That’s why I’ve shied away from initiating a position in WPP so far.
If you liked this week’s snapshot, you’re also welcome to check out my stock series. Here you can find all companies that already went through my stock screener.