WPP: The Next Sector Collapse?


  • WPP has fallen over 48% since February 2018, highlighting greater margins of safety for investors.
  • Growth is currently in decline, fuelling further pessimism by Mr Market.
  • Dividends remain strong at 7.5%, making this an opportunity closer to an income play than to a capital appreciation one.
  • Extremely cash generative business, lack of capex helps maintain the high dividend yield.


Investment Thesis

The current state of WPP remains as divided as the summary of this article. Recent months indicate a flatlining in share price, down just over 48% from the 12-month peak. At this level dividends remain highly attractive at 7.5%, while market conditions remain mixed. WPP performs somewhat significantly below the bench-marks set by traditional competitors, and will continue to do so until 2021 at the earliest - yet this is largely priced in at current levels.

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