ZOETIS INC (ZTS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ZTS - US98978V1035 - Common Stock
125.82 USD
-0.59 (-0.47%)
126.96 USD
+1.14 (+0.91%)
Taking everything into account, ZTS scores 7 out of 10 in our fundamental rating. ZTS was compared to 191 industry peers in the Pharmaceuticals industry. ZTS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ZTS has a correct valuation and a medium growth rate. These ratings would make ZTS suitable for quality investing!
1. Profitability
1.1 Basic Checks
ZTS had positive earnings in the past year.
ZTS had a positive operating cash flow in the past year.
Each year in the past 5 years ZTS has been profitable.
ZTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZTS has a Return On Assets of 17.49%. This is amongst the best in the industry. ZTS outperforms 96.34% of its industry peers.
The Return On Equity of ZTS (49.11%) is better than 97.91% of its industry peers.
Looking at the Return On Invested Capital, with a value of 21.45%, ZTS belongs to the top of the industry, outperforming 96.86% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ZTS is significantly above the industry average of 12.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.49% | ||
| ROE | 49.11% | ||
| ROIC | 21.45% |
ROA(3y)16.01%
ROA(5y)14.94%
ROE(3y)49.01%
ROE(5y)47.06%
ROIC(3y)21.64%
ROIC(5y)19.86%
1.3 Margins
With an excellent Profit Margin value of 28.21%, ZTS belongs to the best of the industry, outperforming 93.72% of the companies in the same industry.
In the last couple of years the Profit Margin of ZTS has grown nicely.
ZTS's Operating Margin of 38.25% is amongst the best of the industry. ZTS outperforms 96.86% of its industry peers.
ZTS's Operating Margin has improved in the last couple of years.
ZTS has a Gross Margin of 71.71%. This is in the better half of the industry: ZTS outperforms 79.06% of its industry peers.
In the last couple of years the Gross Margin of ZTS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.25% | ||
| PM (TTM) | 28.21% | ||
| GM | 71.71% |
OM growth 3Y0.39%
OM growth 5Y2.44%
PM growth 3Y0.84%
PM growth 5Y2.31%
GM growth 3Y0.03%
GM growth 5Y0.65%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ZTS is creating value.
Compared to 1 year ago, ZTS has less shares outstanding
The number of shares outstanding for ZTS has been reduced compared to 5 years ago.
Compared to 1 year ago, ZTS has a worse debt to assets ratio.
2.2 Solvency
ZTS has an Altman-Z score of 6.44. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 6.44, ZTS is doing good in the industry, outperforming 76.96% of the companies in the same industry.
ZTS has a debt to FCF ratio of 3.16. This is a good value and a sign of high solvency as ZTS would need 3.16 years to pay back of all of its debts.
ZTS has a better Debt to FCF ratio (3.16) than 89.01% of its industry peers.
ZTS has a Debt/Equity ratio of 1.31. This is a high value indicating a heavy dependency on external financing.
ZTS has a worse Debt to Equity ratio (1.31) than 75.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 3.16 | ||
| Altman-Z | 6.44 |
ROIC/WACC2.34
WACC9.15%
2.3 Liquidity
A Current Ratio of 3.64 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Current ratio (3.64) which is comparable to the rest of the industry.
A Quick Ratio of 2.28 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Quick ratio (2.28) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.64 | ||
| Quick Ratio | 2.28 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.07% over the past year.
Measured over the past years, ZTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.22% on average per year.
ZTS shows a small growth in Revenue. In the last year, the Revenue has grown by 2.68%.
Measured over the past years, ZTS shows a quite strong growth in Revenue. The Revenue has been growing by 8.14% on average per year.
EPS 1Y (TTM)10.07%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.59%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%0.5%
3.2 Future
The Earnings Per Share is expected to grow by 8.09% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.60% on average over the next years.
EPS Next Y8.15%
EPS Next 2Y7.44%
EPS Next 3Y7.99%
EPS Next 5Y8.09%
Revenue Next Year2.07%
Revenue Next 2Y3.51%
Revenue Next 3Y4.23%
Revenue Next 5Y4.6%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.85, ZTS is valued on the expensive side.
Based on the Price/Earnings ratio, ZTS is valued cheaply inside the industry as 82.20% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (26.51), we can say ZTS is valued slightly cheaper.
ZTS is valuated rather expensively with a Price/Forward Earnings ratio of 18.41.
ZTS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 77.49% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.13, ZTS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.85 | ||
| Fwd PE | 18.41 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued cheaper than 82.72% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ZTS is valued cheaper than 82.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.75 | ||
| EV/EBITDA | 14.8 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZTS does not grow enough to justify the current Price/Earnings ratio.
ZTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.43
PEG (5Y)1.94
EPS Next 2Y7.44%
EPS Next 3Y7.99%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.31%. Purely for dividend investing, there may be better candidates out there.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 0.61. ZTS pays more dividend than 91.62% of the companies in the same industry.
ZTS's Dividend Yield is slightly below the S&P500 average, which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
5.2 History
On average, the dividend of ZTS grows each year by 21.42%, which is quite nice.
ZTS has been paying a dividend for at least 10 years, so it has a reliable track record.
ZTS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
32.55% of the earnings are spent on dividend by ZTS. This is a low number and sustainable payout ratio.
The dividend of ZTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.55%
EPS Next 2Y7.44%
EPS Next 3Y7.99%
125.82
-0.59 (-0.47%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners97.47%
Inst Owner Change-2.24%
Ins Owners0.06%
Ins Owner Change0.11%
Market Cap55.45B
Revenue(TTM)9.40B
Net Income(TTM)2.65B
Analysts80.83
Price Target163.06 (29.6%)
Short Float %2.47%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.55%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.77%
Min EPS beat(2)3.79%
Max EPS beat(2)7.75%
EPS beat(4)4
Avg EPS beat(4)5.09%
Min EPS beat(4)3.63%
Max EPS beat(4)7.75%
EPS beat(8)7
Avg EPS beat(8)3.39%
EPS beat(12)10
Avg EPS beat(12)3.67%
EPS beat(16)12
Avg EPS beat(16)2.98%
Revenue beat(2)1
Avg Revenue beat(2)-0.16%
Min Revenue beat(2)-1.44%
Max Revenue beat(2)1.11%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)1.11%
Revenue beat(8)5
Avg Revenue beat(8)0.74%
Revenue beat(12)6
Avg Revenue beat(12)0.2%
Revenue beat(16)7
Avg Revenue beat(16)-0.15%
PT rev (1m)-6.84%
PT rev (3m)-16.65%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)-6.32%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)-0.3%
Revenue NQ rev (1m)-0.21%
Revenue NQ rev (3m)-2.66%
Revenue NY rev (1m)-0.77%
Revenue NY rev (3m)-0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.85 | ||
| Fwd PE | 18.41 | ||
| P/S | 5.9 | ||
| P/FCF | 24.75 | ||
| P/OCF | 19.01 | ||
| P/B | 10.27 | ||
| P/tB | 34.79 | ||
| EV/EBITDA | 14.8 |
EPS(TTM)6.34
EY5.04%
EPS(NY)6.83
Fwd EY5.43%
FCF(TTM)5.08
FCFY4.04%
OCF(TTM)6.62
OCFY5.26%
SpS21.32
BVpS12.25
TBVpS3.62
PEG (NY)2.43
PEG (5Y)1.94
Graham Number41.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.49% | ||
| ROE | 49.11% | ||
| ROCE | 26.92% | ||
| ROIC | 21.45% | ||
| ROICexc | 25.41% | ||
| ROICexgc | 38.35% | ||
| OM | 38.25% | ||
| PM (TTM) | 28.21% | ||
| GM | 71.71% | ||
| FCFM | 23.84% |
ROA(3y)16.01%
ROA(5y)14.94%
ROE(3y)49.01%
ROE(5y)47.06%
ROIC(3y)21.64%
ROIC(5y)19.86%
ROICexc(3y)27.73%
ROICexc(5y)26.47%
ROICexgc(3y)50.54%
ROICexgc(5y)50.93%
ROCE(3y)27.16%
ROCE(5y)24.93%
ROICexgc growth 3Y2.53%
ROICexgc growth 5Y2.14%
ROICexc growth 3Y5.51%
ROICexc growth 5Y8.06%
OM growth 3Y0.39%
OM growth 5Y2.44%
PM growth 3Y0.84%
PM growth 5Y2.31%
GM growth 3Y0.03%
GM growth 5Y0.65%
F-Score6
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 3.16 | ||
| Debt/EBITDA | 1.73 | ||
| Cap/Depr | 138.24% | ||
| Cap/Sales | 7.19% | ||
| Interest Coverage | 12.22 | ||
| Cash Conversion | 71.42% | ||
| Profit Quality | 84.5% | ||
| Current Ratio | 3.64 | ||
| Quick Ratio | 2.28 | ||
| Altman-Z | 6.44 |
F-Score6
WACC9.15%
ROIC/WACC2.34
Cap/Depr(3y)135.63%
Cap/Depr(5y)123.22%
Cap/Sales(3y)7.63%
Cap/Sales(5y)7.16%
Profit Quality(3y)74.77%
Profit Quality(5y)82.34%
High Growth Momentum
Growth
EPS 1Y (TTM)10.07%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.59%
EPS Next Y8.15%
EPS Next 2Y7.44%
EPS Next 3Y7.99%
EPS Next 5Y8.09%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%0.5%
Revenue Next Year2.07%
Revenue Next 2Y3.51%
Revenue Next 3Y4.23%
Revenue Next 5Y4.6%
EBIT growth 1Y7.7%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year16.84%
EBIT Next 3Y9.66%
EBIT Next 5Y7.94%
FCF growth 1Y50.13%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y32.73%
OCF growth 3Y10.09%
OCF growth 5Y10.47%
ZOETIS INC / ZTS FAQ
What is the ChartMill fundamental rating of ZOETIS INC (ZTS) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ZTS.
Can you provide the valuation status for ZOETIS INC?
ChartMill assigns a valuation rating of 6 / 10 to ZOETIS INC (ZTS). This can be considered as Fairly Valued.
How profitable is ZOETIS INC (ZTS) stock?
ZOETIS INC (ZTS) has a profitability rating of 9 / 10.
Can you provide the expected EPS growth for ZTS stock?
The Earnings per Share (EPS) of ZOETIS INC (ZTS) is expected to grow by 8.15% in the next year.
Is the dividend of ZOETIS INC sustainable?
The dividend rating of ZOETIS INC (ZTS) is 6 / 10 and the dividend payout ratio is 32.55%.