ZOETIS INC (ZTS) Stock Fundamental Analysis
USA - NYSE:ZTS - US98978V1035 - Common Stock
146.49 USD
-0.46 (-0.31%)
146.49 USD
0 (0%)
ZTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 196 industry peers in the Pharmaceuticals industry. ZTS scores excellent on profitability, 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
In the past year ZTS was profitable.
ZTS had a positive operating cash flow in the past year.
In the past 5 years ZTS has always been profitable.
ZTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.04%, ZTS belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
ZTS has a Return On Equity of 52.48%. This is amongst the best in the industry. ZTS outperforms 97.45% of its industry peers.
ZTS has a better Return On Invested Capital (25.36%) than 97.45% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ZTS is significantly above the industry average of 15.28%.
The last Return On Invested Capital (25.36%) for ZTS is above the 3 year average (21.64%), which is a sign of increasing profitability.
| 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
The Profit Margin of ZTS (27.83%) is better than 96.43% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 37.69%, ZTS belongs to the best of the industry, outperforming 96.94% of the companies in the same industry.
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 78.57% of the companies in the same industry.
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 | 37.69% | ||
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ZTS is creating value.
The number of shares outstanding for ZTS has been reduced compared to 1 year ago.
The number of shares outstanding for ZTS has been reduced compared to 5 years ago.
ZTS has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.01 indicates that ZTS is not in any danger for bankruptcy at the moment.
ZTS has a Altman-Z score of 7.01. This is amongst the best in the industry. ZTS outperforms 82.14% of its industry peers.
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.
With an excellent Debt to FCF ratio value of 2.97, ZTS belongs to the best of the industry, outperforming 90.31% of the companies in the same industry.
ZTS has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.05, ZTS is doing worse than 71.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 7.01 |
ROIC/WACC2.62
WACC9.67%
2.3 Liquidity
A Current Ratio of 1.76 indicates that ZTS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.76, ZTS is not doing good in the industry: 64.29% 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.
ZTS's Quick ratio of 1.04 is on the low side compared to the rest of the industry. ZTS is outperformed by 72.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.27% 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 5.27%.
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)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
ZTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.88% yearly.
The Revenue is expected to grow by 5.34% on average over the next years.
EPS Next Y8.48%
EPS Next 2Y8.3%
EPS Next 3Y8.66%
EPS Next 5Y8.88%
Revenue Next Year2.92%
Revenue Next 2Y4.41%
Revenue Next 3Y4.84%
Revenue Next 5Y5.34%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.55, the valuation of ZTS can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 80.10% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.86, ZTS is valued at the same level.
With a Price/Forward Earnings ratio of 21.10, ZTS is valued on the expensive side.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than the industry average as 74.49% of the companies are valued more expensively.
ZTS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.55 | ||
| Fwd PE | 21.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued cheaply inside the industry as 81.12% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 81.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.26 | ||
| EV/EBITDA | 17.42 |
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)2.78
PEG (5Y)2.31
EPS Next 2Y8.3%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.31%.
Compared to an average industry Dividend Yield of 5.44, ZTS pays a better dividend. On top of this ZTS pays more dividend than 90.82% of the companies listed in the same industry.
With a Dividend Yield of 1.31, ZTS pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
5.2 History
The dividend of ZTS is nicely growing with an annual growth rate of 21.42%!
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
32.08% of the earnings are spent on dividend by ZTS. This is a low number and sustainable payout ratio.
ZTS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.08%
EPS Next 2Y8.3%
EPS Next 3Y8.66%
146.49
-0.46 (-0.31%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners98.55%
Inst Owner Change0.66%
Ins Owners0.06%
Ins Owner Change0.03%
Market Cap64.92B
Analysts79.17
Price Target195.62 (33.54%)
Short Float %2.08%
Short Ratio3.02
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)0%
PT rev (3m)-2.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.2%
EPS NY rev (1m)0.15%
EPS NY rev (3m)2.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.55 | ||
| Fwd PE | 21.1 | ||
| P/S | 6.92 | ||
| P/FCF | 29.26 | ||
| P/OCF | 22.17 | ||
| P/B | 13.04 | ||
| P/tB | 56.75 | ||
| EV/EBITDA | 17.42 |
EPS(TTM)6.22
EY4.25%
EPS(NY)6.94
Fwd EY4.74%
FCF(TTM)5.01
FCFY3.42%
OCF(TTM)6.61
OCFY4.51%
SpS21.18
BVpS11.23
TBVpS2.58
PEG (NY)2.78
PEG (5Y)2.31
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 | 7.01 |
F-Score8
WACC9.67%
ROIC/WACC2.62
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 Y8.48%
EPS Next 2Y8.3%
EPS Next 3Y8.66%
EPS Next 5Y8.88%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%4.19%
Revenue Next Year2.92%
Revenue Next 2Y4.41%
Revenue Next 3Y4.84%
Revenue Next 5Y5.34%
EBIT growth 1Y10.05%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year17.77%
EBIT Next 3Y10.41%
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%