ZOETIS INC (ZTS) Stock Fundamental Analysis
NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock - Currency: USD
ZTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 193 industry peers in the Pharmaceuticals industry. ZTS scores excellent on profitability, but there are some minor concerns on its financial health. ZTS has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year ZTS was profitable.
In the past year ZTS had a positive cash flow from operations.
Each year in the past 5 years ZTS has been profitable.
In the past 5 years ZTS always reported a positive cash flow from operatings.
1.2 Ratios
ZTS's Return On Assets of 18.04% is amongst the best of the industry. ZTS outperforms 97.41% of its industry peers.
Looking at the Return On Equity, with a value of 52.48%, ZTS belongs to the top of the industry, outperforming 97.93% of the companies in the same industry.
ZTS's Return On Invested Capital of 25.36% is amongst the best of the industry. ZTS outperforms 96.89% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZTS is significantly above the industry average of 15.57%.
The 3 year average ROIC (21.64%) for ZTS is below the current ROIC(25.36%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.04% | ||
| ROE | 52.48% | ||
| ROIC | 25.36% |
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 better Profit Margin (27.83%) than 96.89% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
ZTS has a better Operating Margin (37.69%) than 96.37% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
With a decent Gross Margin value of 71.50%, ZTS is doing good in the industry, outperforming 79.27% of the companies in the same industry.
ZTS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.69% | ||
| PM (TTM) | 27.83% | ||
| GM | 71.5% |
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
Compared to 5 years ago, ZTS has less shares outstanding
ZTS has a worse debt/assets ratio than last year.
2.2 Solvency
ZTS has an Altman-Z score of 7.24. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 7.24, ZTS belongs to the best of the industry, outperforming 85.49% of the companies in the same industry.
The Debt to FCF ratio of ZTS is 2.97, which is a good value as it means it would take ZTS, 2.97 years of fcf income to pay off all of its debts.
ZTS's Debt to FCF ratio of 2.97 is amongst the best of the industry. ZTS outperforms 89.64% of its industry peers.
A Debt/Equity ratio of 1.05 is on the high side and indicates that ZTS has dependencies on debt financing.
ZTS has a Debt to Equity ratio of 1.05. This is in the lower half of the industry: ZTS underperforms 73.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 7.24 |
ROIC/WACC2.56
WACC9.91%
2.3 Liquidity
ZTS has a Current Ratio of 1.76. This is a normal value and indicates that ZTS is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.76, ZTS is not doing good in the industry: 63.21% of the companies in the same industry are doing better.
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.
With a Quick ratio value of 1.04, ZTS is not doing good in the industry: 73.06% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| 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 12.27%, which is quite good.
The Earnings Per Share has been growing by 10.22% on average over the past years. This is quite good.
Looking at the last year, ZTS shows a small growth in Revenue. The Revenue has grown by 5.27% in the last year.
The Revenue has been growing by 8.14% on average over the past years. This is quite good.
EPS 1Y (TTM)12.27%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%12.82%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%4.19%
3.2 Future
The Earnings Per Share is expected to grow by 9.17% on average over the next years. This is quite good.
Based on estimates for the next years, ZTS will show a small growth in Revenue. The Revenue will grow by 5.17% on average per year.
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.17%
Revenue Next Year2.65%
Revenue Next 2Y4.38%
Revenue Next 3Y4.87%
Revenue Next 5Y5.17%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
ZTS is valuated rather expensively with a Price/Earnings ratio of 24.49.
ZTS's Price/Earnings ratio is rather cheap when compared to the industry. ZTS is cheaper than 80.83% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (26.82), we can say ZTS is valued inline with the index average.
ZTS is valuated rather expensively with a Price/Forward Earnings ratio of 22.08.
73.58% of the companies in the same industry are more expensive than ZTS, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.24, ZTS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.08 |
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 81.35% 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 78.76% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.56 | ||
| EV/EBITDA | 18.33 |
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)3.95
PEG (5Y)2.4
EPS Next 2Y7.94%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.31%, ZTS has a reasonable but not impressive dividend return.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.04. ZTS pays more dividend than 90.67% of the companies in the same industry.
With a Dividend Yield of 1.31, ZTS pays less dividend than the S&P500 average, which is at 2.36.
| 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 paid a dividend for at least 10 years, which is a reliable track record.
ZTS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
32.08% 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.
DP32.08%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
152.32
-1.79 (-1.16%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.66%
Inst Owner Change0.63%
Ins Owners0.06%
Ins Owner Change-0.09%
Market Cap67.81B
Analysts79.17
Price Target196.39 (28.93%)
Short Float %1.77%
Short Ratio2.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.08%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.46%
Min EPS beat(2)5.17%
Max EPS beat(2)7.75%
EPS beat(4)4
Avg EPS beat(4)6.02%
Min EPS beat(4)3.63%
Max EPS beat(4)7.75%
EPS beat(8)6
Avg EPS beat(8)2.8%
EPS beat(12)9
Avg EPS beat(12)3.1%
EPS beat(16)12
Avg EPS beat(16)3.49%
Revenue beat(2)2
Avg Revenue beat(2)0.74%
Min Revenue beat(2)0.36%
Max Revenue beat(2)1.11%
Revenue beat(4)3
Avg Revenue beat(4)1.14%
Min Revenue beat(4)-0.26%
Max Revenue beat(4)3.33%
Revenue beat(8)5
Avg Revenue beat(8)0.65%
Revenue beat(12)6
Avg Revenue beat(12)-0.08%
Revenue beat(16)8
Avg Revenue beat(16)0.06%
PT rev (1m)-2.13%
PT rev (3m)-3.24%
EPS NQ rev (1m)-1.2%
EPS NQ rev (3m)0.85%
EPS NY rev (1m)0%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)-0.28%
Revenue NQ rev (3m)1.74%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 22.08 | ||
| P/S | 7.23 | ||
| P/FCF | 30.56 | ||
| P/OCF | 23.15 | ||
| P/B | 13.63 | ||
| P/tB | 59.28 | ||
| EV/EBITDA | 18.33 |
EPS(TTM)6.22
EY4.08%
EPS(NY)6.9
Fwd EY4.53%
FCF(TTM)4.98
FCFY3.27%
OCF(TTM)6.58
OCFY4.32%
SpS21.08
BVpS11.18
TBVpS2.57
PEG (NY)3.95
PEG (5Y)2.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.04% | ||
| ROE | 52.48% | ||
| ROCE | 31.83% | ||
| ROIC | 25.36% | ||
| ROICexc | 29.12% | ||
| ROICexgc | 48.22% | ||
| OM | 37.69% | ||
| PM (TTM) | 27.83% | ||
| GM | 71.5% | ||
| FCFM | 23.64% |
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 Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 146.09% | ||
| Cap/Sales | 7.57% | ||
| Interest Coverage | 12.96 | ||
| Cash Conversion | 72.81% | ||
| Profit Quality | 84.95% | ||
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 7.24 |
F-Score8
WACC9.91%
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)12.27%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%12.82%
EPS Next Y6.2%
EPS Next 2Y7.94%
EPS Next 3Y8.66%
EPS Next 5Y9.17%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%4.19%
Revenue Next Year2.65%
Revenue Next 2Y4.38%
Revenue Next 3Y4.87%
Revenue Next 5Y5.17%
EBIT growth 1Y10.05%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year17.06%
EBIT Next 3Y10.76%
EBIT Next 5Y8.69%
FCF growth 1Y72.68%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y46.52%
OCF growth 3Y10.09%
OCF growth 5Y10.47%