WPP PLC (WPP) share price soared almost 34% in the last twelve months and nearly 50% in the last three years on the back of its strong financial performances. The company continues to impress investors with revenue and earnings expansion strategies. It has expanded its revenue base from £11 billion in 2013 to £12.2 billion in 2015, thanks to its expansion strategies.
The company’s management looks top notch, as it has been smoothly converting its strong revenue growth into big profits for investors. WPP’s earnings per share increased from £0.70 in 2013 to £0.88 per share in fiscal 2015.
What’s more, the company’s cash conversion ratio also remained strong. In the last year, its cash conversion ratio to net income stood around 100%. WPP currently offers semi-annual dividends to investors. The company currently offers a dividend yield of 2.5%.
WPP’s strong performance and healthy returns were the result its attractive business model and extensive footprints. The company operates in North America, UK, Western Continental Europe, Asia Pacific, Latin American, Africa & Middle East and Central & Eastern Europe.
The company’s future business fundamentals are very strong, as it is poised to generate high mid-single digit growth in sales and a double-digit growth in earnings. In the first half of 2016, its revenue increased 11.9% to £6.5 billion, compared with the same period of last year.
WPP increased its by dividends by 22.9%, and its pay-out ratio stood around 50%, which is in line with the revised target pay-out ratio of 50%. It repurchased £197 million of outstanding shares in the first half of this year following a buyback £405 million of outstanding shares in the same period of last year.
Share buyback is always very important for any company, as this represents the company’s liquidity strength and its focus on returning cash to investors.
WPP stock price currently trades around £1,780.00 (*at time of writing), while analysts anticipate further upside amid its strong financial performance and strategy to expand its market share. Therefore, buying and holding this stock is a wise strategy.