I started my research on this dividend indicator by comparing the current yield with the historical yield on the stock. For example, as I’ve noted in my Special Report Omnicom Group (OMC) currently pays a forward yield of 4.00% on its closing price of $64.99 on December 4. That’s quite a bit higher than the five-year average yield of 3.23% over the last five years. Looking at other measures confirms the possibility that this stock is undervalued. The current price to sales ratio is 1.04 compared to a five-year average of 1.14. The forward price to earnings ratio (on projected earnings over the next 12 months) is 11.79 versus the five year average of 13.72. And by Morningstar’s calculation, the stock is undervalued by 18%. The shares are still down 17.38% for 2020 to date but they show good momentum in the current “look-ahead” rally with a 21.38% gain in the last three months. Ultimately, though, I want to see if this is a company with the potential to see revenue and earnings bounce back after a vaccine has brought the coronavirus pandemic under control. On the one hand, I should be able to see a big decline in revenue and earnings because of the coronavirus pandemic. That’s the case here. In the third quarter total revenue fell 11.5% year over year due to an 11.7% drop in organic revenue. The company reported weakness across all regions, with organic revenue in the U.S. and North America (which together represent 58% of total revenue) down 11.2% year over year. It certainly makes sense that companies would be cutting back on advertising spending as the coronavirus ravaged the global economy. On the other hand, what was also important to see is that the year over year revenue decline was smaller than in the previous quarter (when it hit 21.1%.) That’s important because you’d certainly like some indication that you’re not buying into a business that’s 1) not likely to survive to the turnaround and 2) that’s fundamentally sound. In the case of Omnicom, one critical issue is the continued growth of digital advertising spending at the expense of traditional ad spending that agencies like Omnicom (the second largest advertising player by revenue) were built on. It’s fair to say that Omnicom and its peers–the five companies that account for 30% of total global advertising spending–provide value to large clients such as car companies by being able to address all advertising media from digital to TV to print to whatever. It’s also important to note, however, that digital advertising accounts for an increasing percentage of all ad spending–and that any big player that isn’t driving hard into this space is in danger of being left behind. The company launched Omni, an open source data and analytics platform in 2018 to expand its digital footprint and to enable Omnicom to integrate ad strategies across media. And the company continues to invest, including acquisitions such as Credera (a “martech” company that focuses on marketing, technology, and e-commerce), Smart Digital (a German AI company) and DMW (a U.K. company that will be folded into Credera.) Whether these acquisitions and investment will be enough to meet the digital challenge is, of course, unclear but Omnicom is clearly aware of the problem and is making an effort to move ahead on this front. As of Monday, December 7, Im adding these shares to my Jubak Picks Portfolio with a target price of $79 a share.