ZOETIS INC (ZTS)
US98978V1035 - Common Stock
We assign a fundamental rating of 7 out of 10 to ZTS. ZTS was compared to 198 industry peers in the Pharmaceuticals industry. ZTS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ZTS has a decent growth rate and is not valued too expensively. These ratings would make ZTS suitable for quality investing!
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.
In the past 5 years ZTS has always 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 16.41% is amongst the best of the industry. ZTS outperforms 96.41% of its industry peers.
The Return On Equity of ZTS (46.91%) is better than 96.92% of its industry peers.
ZTS's Return On Invested Capital of 19.93% is amongst the best of the industry. ZTS outperforms 96.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ZTS is above the industry average of 16.38%.
The 3 year average ROIC (19.48%) for ZTS is below the current ROIC(19.93%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.41% | ||
| ROE | 46.91% | ||
| ROIC | 19.93% |
ROA(3y)15.08%
ROA(5y)14.05%
ROE(3y)46.58%
ROE(5y)47.72%
ROIC(3y)19.48%
ROIC(5y)18.18%
1.3 Margins
ZTS's Profit Margin of 27.43% is amongst the best of the industry. ZTS outperforms 94.87% of its industry peers.
In the last couple of years the Profit Margin of ZTS has grown nicely.
The Operating Margin of ZTS (36.34%) is better than 96.92% of its industry peers.
ZTS's Operating Margin has improved in the last couple of years.
ZTS has a Gross Margin of 70.47%. This is in the better half of the industry: ZTS outperforms 76.41% 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 | 36.34% | ||
| PM (TTM) | 27.43% | ||
| GM | 70.47% |
OM growth 3Y2.16%
OM growth 5Y1.94%
PM growth 3Y3.79%
PM growth 5Y2.28%
GM growth 3Y0.53%
GM growth 5Y0.81%
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
ZTS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ZTS has an improved debt to assets ratio.
2.2 Solvency
ZTS has an Altman-Z score of 7.63. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZTS (7.63) is better than 84.10% of its industry peers.
The Debt to FCF ratio of ZTS is 4.05, which is a neutral value as it means it would take ZTS, 4.05 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ZTS (4.05) is better than 88.72% of its industry peers.
ZTS has a Debt/Equity ratio of 1.31. This is a high value indicating a heavy dependency on external financing.
ZTS's Debt to Equity ratio of 1.31 is on the low side compared to the rest of the industry. ZTS is outperformed by 76.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 4.05 | ||
| Altman-Z | 7.63 |
ROIC/WACC2.29
WACC8.7%
2.3 Liquidity
ZTS has a Current Ratio of 3.36. This indicates that ZTS is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.36, ZTS is in line with its industry, outperforming 51.79% of the companies in the same industry.
ZTS has a Quick Ratio of 2.00. This indicates that ZTS is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of ZTS (2.00) is worse than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.36 | ||
| Quick Ratio | 2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.02% over the past year.
The Earnings Per Share has been growing by 11.12% on average over the past years. This is quite good.
ZTS shows a small growth in Revenue. In the last year, the Revenue has grown by 5.74%.
ZTS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.96% yearly.
EPS 1Y (TTM)9.02%
EPS 3Y11.38%
EPS 5Y11.12%
EPS growth Q2Q7.83%
Revenue 1Y (TTM)5.74%
Revenue growth 3Y8.58%
Revenue growth 5Y7.96%
Revenue growth Q2Q8.48%
3.2 Future
Based on estimates for the next years, ZTS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.20% on average per year.
ZTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.84% yearly.
EPS Next Y10.15%
EPS Next 2Y10.89%
EPS Next 3Y10.77%
EPS Next 5Y11.2%
Revenue Next Year7.68%
Revenue Next 2Y7.39%
Revenue Next 3Y7.07%
Revenue Next 5Y6.84%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 31.40, which means the current valuation is very expensive for ZTS.
82.56% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (28.28), we can say ZTS is valued inline with the index average.
With a Price/Forward Earnings ratio of 28.51, ZTS can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than 79.49% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (20.88), we can say ZTS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 28.51 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued a bit cheaper than the industry average as 78.46% of the companies are valued more expensively.
79.49% of the companies in the same industry are more expensive than ZTS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.1 | ||
| EV/EBITDA | 22.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ZTS may justify a higher PE ratio.
PEG (NY)3.09
PEG (5Y)2.82
EPS Next 2Y10.89%
EPS Next 3Y10.77%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.03%, ZTS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.21, ZTS pays a better dividend. On top of this ZTS pays more dividend than 90.77% of the companies listed in the same industry.
With a Dividend Yield of 1.03, ZTS pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
5.2 History
On average, the dividend of ZTS grows each year by 24.43%, 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)24.43%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
ZTS pays out 29.52% 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.
DP29.52%
EPS Next 2Y10.89%
EPS Next 3Y10.77%
ZOETIS INC
NYSE:ZTS (5/3/2024, 7:04:00 PM)
After market: 167.07 0 (0%)167.07
-0.16 (-0.1%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap76.34B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 28.51 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.09
PEG (5Y)2.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.41% | ||
| ROE | 46.91% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 36.34% | ||
| PM (TTM) | 27.43% | ||
| GM | 70.47% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.36 | ||
| Quick Ratio | 2 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)9.02%
EPS 3Y11.38%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.15%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.74%
Revenue growth 3Y8.58%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y