ZOETIS INC (ZTS) Stock Fundamental Analysis
NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock - Currency: USD
Taking everything into account, ZTS scores 7 out of 10 in our fundamental rating. ZTS was compared to 194 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 has a Return On Assets of 17.86%. This is amongst the best in the industry. ZTS outperforms 97.94% of its industry peers.
ZTS has a better Return On Equity (54.09%) than 97.94% of its industry peers.
With an excellent Return On Invested Capital value of 25.63%, ZTS belongs to the best of the industry, outperforming 97.42% 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 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
The Profit Margin of ZTS (27.12%) is better than 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.
ZTS's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ZTS is creating value.
The number of shares outstanding for ZTS has been reduced compared to 1 year ago.
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 7.08. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
ZTS has a Altman-Z score of 7.08. This is amongst the best in the industry. ZTS outperforms 84.02% of its industry peers.
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.
ZTS's Debt to FCF ratio of 2.88 is amongst the best of the industry. ZTS outperforms 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's Debt to Equity ratio of 1.12 is on the low side compared to the rest of the industry. ZTS is outperformed by 72.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Altman-Z | 7.08 |
ROIC/WACC2.6
WACC9.87%
2.3 Liquidity
A Current Ratio of 1.74 indicates that ZTS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.74, ZTS is not doing good in the industry: 64.95% of the companies in the same industry are doing better.
A Quick Ratio of 1.04 indicates that ZTS should not have too much problems paying its short term obligations.
The Quick ratio of ZTS (1.04) is worse than 73.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.69% over the past year.
ZTS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.22% yearly.
Looking at the last year, ZTS shows a small growth in Revenue. The Revenue has grown by 6.32% in the last year.
ZTS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.14% yearly.
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.
The Revenue is expected to grow by 5.61% on average over the next years.
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
The Price/Earnings ratio is 25.11, which means the current valuation is very expensive for ZTS.
Based on the Price/Earnings ratio, ZTS is valued cheaper than 81.96% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.53, ZTS is valued at the same level.
ZTS is valuated rather expensively with a Price/Forward Earnings ratio of 21.92.
73.71% of the companies in the same industry are more expensive than ZTS, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (36.71), we can say ZTS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.11 | ||
| Fwd PE | 21.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued cheaply inside the industry as 80.41% of the companies are valued more expensively.
ZTS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 79.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.51 | ||
| EV/EBITDA | 17.9 |
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.
The excellent profitability rating of ZTS 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
With a Yearly Dividend Yield of 1.33%, ZTS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.08, ZTS pays a better dividend. On top of this ZTS pays more dividend than 90.72% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, ZTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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 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
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%
151.19
+3.82 (+2.59%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.42%
Inst Owner Change-0.61%
Ins Owners0.06%
Ins Owner Change5.03%
Market Cap67.31B
Analysts80.83
Price Target200.66 (32.72%)
Short Float %2.06%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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)-0.16%
PT rev (3m)-3.32%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.89%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)1.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.12%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.11 | ||
| Fwd PE | 21.92 | ||
| P/S | 7.25 | ||
| P/FCF | 29.51 | ||
| P/OCF | 22.86 | ||
| P/B | 14.46 | ||
| P/tB | 78.54 | ||
| EV/EBITDA | 17.9 |
EPS(TTM)6.02
EY3.98%
EPS(NY)6.9
Fwd EY4.56%
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 | 7.08 |
F-Score8
WACC9.87%
ROIC/WACC2.6
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%