ZOETIS INC (ZTS) Stock Fundamental Analysis
USA - NYSE:ZTS - US98978V1035 - Common Stock
148.2 USD
-2.41 (-1.6%)
148.2 USD
0 (0%)
Overall ZTS gets a fundamental rating of 7 out of 10. We evaluated ZTS against 195 industry peers in the Pharmaceuticals industry. While ZTS has a great profitability rating, 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.
In the past year ZTS had a positive cash flow from operations.
Each year in the past 5 years ZTS has been profitable.
Each year in the past 5 years ZTS had a positive operating cash flow.
1.2 Ratios
ZTS's Return On Assets of 18.04% is amongst the best of the industry. ZTS outperforms 96.41% of its industry peers.
ZTS's Return On Equity of 52.48% is amongst the best of the industry. ZTS outperforms 97.44% of its industry peers.
Looking at the Return On Invested Capital, with a value of 25.36%, ZTS belongs to the top of the industry, outperforming 97.44% of the companies in the same industry.
ZTS had an Average Return On Invested Capital over the past 3 years of 21.64%. This is significantly above the industry average of 15.28%.
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
With an excellent Profit Margin value of 27.83%, ZTS belongs to the best of the industry, outperforming 96.41% of the companies in the same industry.
In the last couple of years the Profit Margin of ZTS has grown nicely.
The Operating Margin of ZTS (37.69%) is better than 96.92% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
ZTS has a Gross Margin of 71.50%. This is in the better half of the industry: ZTS outperforms 78.46% of its industry peers.
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ZTS is creating value.
Compared to 1 year ago, ZTS has less shares outstanding
ZTS has less shares outstanding than it did 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 7.13. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
ZTS has a better Altman-Z score (7.13) than 82.56% of its industry peers.
ZTS has a debt to FCF ratio of 2.97. This is a good value and a sign of high solvency as ZTS would need 2.97 years to pay back of all of its debts.
ZTS has a Debt to FCF ratio of 2.97. This is amongst the best in the industry. ZTS outperforms 90.26% 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's Debt to Equity ratio of 1.05 is on the low side compared to the rest of the industry. ZTS is outperformed by 72.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 7.13 |
ROIC/WACC2.61
WACC9.71%
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.
Looking at the Current ratio, with a value of 1.76, ZTS is doing worse than 64.10% of the companies in the same industry.
A Quick Ratio of 1.04 indicates that ZTS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.04, ZTS is doing worse than 72.82% of the companies in the same industry.
| 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.
ZTS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.22% yearly.
The Revenue has been growing slightly by 5.27% in the past 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)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 8.88% 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 5.34% on average per year.
EPS Next Y8.32%
EPS Next 2Y8.32%
EPS Next 3Y8.67%
EPS Next 5Y8.88%
Revenue Next Year2.92%
Revenue Next 2Y4.45%
Revenue Next 3Y4.86%
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.
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 23.83, the valuation of ZTS can be described as rather expensive.
81.03% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, ZTS is valued at the same level.
ZTS is valuated rather expensively with a Price/Forward Earnings ratio of 21.34.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZTS indicates a somewhat cheap valuation: ZTS is cheaper than 74.36% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.73. ZTS is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.83 | ||
| Fwd PE | 21.34 |
4.2 Price Multiples
81.03% of the companies in the same industry are more expensive than ZTS, based on the Enterprise Value to EBITDA ratio.
ZTS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ZTS is cheaper than 80.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.6 | ||
| EV/EBITDA | 17.87 |
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)2.87
PEG (5Y)2.33
EPS Next 2Y8.32%
EPS Next 3Y8.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.31%, ZTS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.72, ZTS pays a better dividend. On top of this ZTS pays more dividend than 90.77% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, ZTS's dividend is way lower than the S&P500 average.
| 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
ZTS pays out 32.08% 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.
DP32.08%
EPS Next 2Y8.32%
EPS Next 3Y8.67%
148.2
-2.41 (-1.6%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.66%
Inst Owner Change0.66%
Ins Owners0.06%
Ins Owner Change-0.09%
Market Cap65.68B
Analysts79.17
Price Target195.62 (32%)
Short Float %1.49%
Short Ratio2.08
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)-0.39%
PT rev (3m)-2.66%
EPS NQ rev (1m)-1.35%
EPS NQ rev (3m)0.8%
EPS NY rev (1m)1.99%
EPS NY rev (3m)2.07%
Revenue NQ rev (1m)-0.61%
Revenue NQ rev (3m)1.66%
Revenue NY rev (1m)0.26%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.83 | ||
| Fwd PE | 21.34 | ||
| P/S | 7 | ||
| P/FCF | 29.6 | ||
| P/OCF | 22.42 | ||
| P/B | 13.2 | ||
| P/tB | 57.41 | ||
| EV/EBITDA | 17.87 |
EPS(TTM)6.22
EY4.2%
EPS(NY)6.95
Fwd EY4.69%
FCF(TTM)5.01
FCFY3.38%
OCF(TTM)6.61
OCFY4.46%
SpS21.18
BVpS11.23
TBVpS2.58
PEG (NY)2.87
PEG (5Y)2.33
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 | 7.13 |
F-Score8
WACC9.71%
ROIC/WACC2.61
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 Y8.32%
EPS Next 2Y8.32%
EPS Next 3Y8.67%
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 2Y4.45%
Revenue Next 3Y4.86%
Revenue Next 5Y5.34%
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%