ZOETIS INC (ZTS)
US98978V1035 - Common Stock
Overall ZTS gets a fundamental rating of 7 out of 10. We evaluated ZTS against 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 correct valuation and a medium growth rate. These ratings would make ZTS suitable for quality investing!
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.
In the past 5 years ZTS has always been profitable.
Each year in the past 5 years ZTS had a positive operating cash flow.
1.2 Ratios
ZTS has a Return On Assets of 16.41%. This is amongst the best in the industry. ZTS outperforms 96.41% of its industry peers.
ZTS's Return On Equity of 46.91% is amongst the best of the industry. ZTS outperforms 96.92% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.93%, ZTS belongs to the top of the industry, outperforming 96.41% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ZTS is above the industry average of 16.40%.
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 has a better Profit Margin (27.43%) than 94.87% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
ZTS has a better Operating Margin (36.34%) 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.
ZTS's Gross Margin has been stable in the last couple of years.
| 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.
ZTS has less shares outstanding than it did 1 year ago.
ZTS has less shares outstanding than it did 5 years ago.
ZTS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.15 indicates that ZTS is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.15, ZTS belongs to the best of the industry, outperforming 84.10% of the companies in the same industry.
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.
With an excellent Debt to FCF ratio value of 4.05, ZTS belongs to the best of the industry, outperforming 88.21% of the companies in the same industry.
A Debt/Equity ratio of 1.31 is on the high side and indicates that ZTS has dependencies on debt financing.
ZTS has a Debt to Equity ratio of 1.31. This is in the lower half of the industry: ZTS underperforms 76.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 4.05 | ||
| Altman-Z | 7.15 |
ROIC/WACC2.29
WACC8.72%
2.3 Liquidity
A Current Ratio of 3.36 indicates that ZTS has no problem at all paying its short term obligations.
With a Current ratio value of 3.36, ZTS perfoms like the industry average, 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%.
Measured over the past years, ZTS shows a small growth in Revenue. The Revenue has been growing by 7.96% on average per year.
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
ZTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.78% yearly.
ZTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.55% yearly.
EPS Next Y10.15%
EPS Next 2Y10.89%
EPS Next 3Y10.77%
EPS Next 5Y9.78%
Revenue Next Year7.68%
Revenue Next 2Y7.39%
Revenue Next 3Y7.07%
Revenue Next 5Y6.55%
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
ZTS is valuated quite expensively with a Price/Earnings ratio of 28.83.
Based on the Price/Earnings ratio, ZTS is valued cheaply inside the industry as 82.05% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.20. ZTS is around the same levels.
The Price/Forward Earnings ratio is 26.17, which means the current valuation is very expensive for ZTS.
ZTS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.63. ZTS is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.83 | ||
| Fwd PE | 26.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued a bit cheaper than 78.46% of the companies 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 79.49% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.23 | ||
| EV/EBITDA | 20.43 |
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)2.84
PEG (5Y)2.59
EPS Next 2Y10.89%
EPS Next 3Y10.77%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.13%.
Compared to an average industry Dividend Yield of 4.45, ZTS pays a better dividend. On top of this ZTS pays more dividend than 91.28% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ZTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
5.2 History
On average, the dividend of ZTS grows each year by 24.43%, 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 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
29.52% 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.
DP29.52%
EPS Next 2Y10.89%
EPS Next 3Y10.77%
ZOETIS INC
NYSE:ZTS (4/25/2024, 7:27:01 PM)
After market: 152.87 -0.49 (-0.32%)153.36
+2.48 (+1.64%)
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 Cap70.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
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)
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EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.83 | ||
| Fwd PE | 26.17 | ||
| 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)2.84
PEG (5Y)2.59
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
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OCF growth 5Y