ZOETIS INC (ZTS) Stock Fundamental Analysis
NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock - Currency: USD
Overall ZTS gets a fundamental rating of 7 out of 10. We evaluated ZTS against 194 industry peers in the Pharmaceuticals industry. ZTS has an excellent profitability rating, but there are some minor concerns on its financial health. ZTS is not valued too expensively and it also shows a decent growth rate.
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.
ZTS had positive earnings in each of the past 5 years.
ZTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZTS has a better Return On Assets (17.86%) than 97.94% of its industry peers.
ZTS has a Return On Equity of 54.09%. This is amongst the best in the industry. ZTS outperforms 97.94% of its industry peers.
The Return On Invested Capital of ZTS (25.63%) is better than 97.42% of its industry peers.
ZTS had an Average Return On Invested Capital over the past 3 years of 21.64%. This is significantly above the industry average of 14.87%.
The last Return On Invested Capital (25.63%) for ZTS is above the 3 year average (21.64%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROIC | 25.63% |
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
ZTS has a Profit Margin of 27.12%. This is amongst the best in the industry. ZTS outperforms 96.39% of its industry peers.
In the last couple of years the Profit Margin of ZTS has grown nicely.
ZTS has a Operating Margin of 37.11%. This is amongst the best in the industry. ZTS outperforms 96.91% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
The Gross Margin of ZTS (70.98%) is better than 79.38% 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 | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% |
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
ZTS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
ZTS has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ZTS has less shares outstanding
The debt/assets ratio for ZTS is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.17 indicates that ZTS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.17, ZTS belongs to the top of the industry, outperforming 84.02% of the companies in the same industry.
ZTS has a debt to FCF ratio of 2.88. This is a good value and a sign of high solvency as ZTS would need 2.88 years to pay back of all of its debts.
The Debt to FCF ratio of ZTS (2.88) is better than 91.24% of its industry peers.
A Debt/Equity ratio of 1.12 is on the high side and indicates that ZTS has dependencies on debt financing.
ZTS has a worse Debt to Equity ratio (1.12) than 72.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Altman-Z | 7.17 |
ROIC/WACC2.56
WACC10.02%
2.3 Liquidity
A Current Ratio of 1.74 indicates that ZTS should not have too much problems paying its short term obligations.
The Current ratio of ZTS (1.74) is worse than 64.95% of its industry peers.
ZTS has a Quick Ratio of 1.04. This is a normal value and indicates that ZTS is financially healthy and should not expect problems in meeting its short term obligations.
ZTS's Quick ratio of 1.04 is on the low side compared to the rest of the industry. ZTS is outperformed by 73.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
ZTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.69%, which is quite good.
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.
Looking at the last year, ZTS shows a small growth in Revenue. The Revenue has grown by 6.32% in the last year.
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)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
3.2 Future
ZTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.50% yearly.
Based on estimates for the next years, ZTS will show a small growth in Revenue. The Revenue will grow by 5.61% on average per year.
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.5%
Revenue Next Year2.47%
Revenue Next 2Y4.3%
Revenue Next 3Y4.86%
Revenue Next 5Y5.61%
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 stable.
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
Based on the Price/Earnings ratio of 25.08, the valuation of ZTS can be described as expensive.
81.96% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
ZTS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.91, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 21.89, which indicates a rather expensive current valuation of ZTS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZTS indicates a somewhat cheap valuation: ZTS is cheaper than 73.20% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (37.11), we can say ZTS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.08 | ||
| Fwd PE | 21.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 80.41% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTS indicates a somewhat cheap valuation: ZTS is cheaper than 79.90% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.47 | ||
| EV/EBITDA | 18.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ZTS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.05
PEG (5Y)2.46
EPS Next 2Y7.94%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.30%. 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 3.99. ZTS pays more dividend than 90.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, ZTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
5.2 History
On average, the dividend of ZTS grows each year by 21.42%, which is quite nice.
ZTS has paid a dividend for at least 10 years, which is 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
ZTS pays out 32.25% of its income as dividend. This is a sustainable payout ratio.
The dividend of ZTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.25%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
151.01
+0.26 (+0.17%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.42%
Inst Owner Change-0.76%
Ins Owners0.06%
Ins Owner Change5.03%
Market Cap67.23B
Analysts80.83
Price Target200.66 (32.88%)
Short Float %1.77%
Short Ratio2.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.25%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.4%
Min EPS beat(2)3.63%
Max EPS beat(2)5.17%
EPS beat(4)4
Avg EPS beat(4)5.06%
Min EPS beat(4)3.63%
Max EPS beat(4)7.51%
EPS beat(8)6
Avg EPS beat(8)2.6%
EPS beat(12)8
Avg EPS beat(12)2.24%
EPS beat(16)12
Avg EPS beat(16)3.55%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)0.36%
Revenue beat(4)3
Avg Revenue beat(4)1.15%
Min Revenue beat(4)-0.26%
Max Revenue beat(4)3.33%
Revenue beat(8)4
Avg Revenue beat(8)0.48%
Revenue beat(12)5
Avg Revenue beat(12)-0.19%
Revenue beat(16)8
Avg Revenue beat(16)0.35%
PT rev (1m)0%
PT rev (3m)-2.82%
EPS NQ rev (1m)0.45%
EPS NQ rev (3m)1.35%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)1.73%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.08 | ||
| Fwd PE | 21.89 | ||
| P/S | 7.24 | ||
| P/FCF | 29.47 | ||
| P/OCF | 22.83 | ||
| P/B | 14.44 | ||
| P/tB | 78.45 | ||
| EV/EBITDA | 18.29 |
EPS(TTM)6.02
EY3.99%
EPS(NY)6.9
Fwd EY4.57%
FCF(TTM)5.12
FCFY3.39%
OCF(TTM)6.61
OCFY4.38%
SpS20.86
BVpS10.46
TBVpS1.92
PEG (NY)4.05
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROCE | 32.17% | ||
| ROIC | 25.63% | ||
| ROICexc | 30.53% | ||
| ROICexgc | 52.86% | ||
| OM | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% | ||
| FCFM | 24.56% |
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%
ROICexcg growth 3Y2.53%
ROICexcg 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-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 135.51% | ||
| Cap/Sales | 7.15% | ||
| Interest Coverage | 12.58 | ||
| Cash Conversion | 74.82% | ||
| Profit Quality | 90.59% | ||
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 7.17 |
F-Score8
WACC10.02%
ROIC/WACC2.56
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)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.5%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
Revenue Next Year2.47%
Revenue Next 2Y4.3%
Revenue Next 3Y4.86%
Revenue Next 5Y5.61%
EBIT growth 1Y9.64%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year16.87%
EBIT Next 3Y10.58%
EBIT Next 5Y9.07%
FCF growth 1Y56.45%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y36.85%
OCF growth 3Y10.09%
OCF growth 5Y10.47%