ZOETIS INC (ZTS)
US98978V1035 - Common Stock
ZTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 193 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. This makes ZTS very considerable 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.
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 16.93%. This is amongst the best in the industry. ZTS outperforms 97.37% of its industry peers.
ZTS has a Return On Equity of 46.43%. This is amongst the best in the industry. ZTS outperforms 96.84% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.99%, ZTS belongs to the top of the industry, outperforming 96.84% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ZTS is significantly below the industry average of 43.18%.
The 3 year average ROIC (19.47%) for ZTS is below the current ROIC(20.99%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.93% | ||
| ROE | 46.43% | ||
| ROIC | 20.99% |
ROA(3y)15.08%
ROA(5y)14.05%
ROE(3y)46.58%
ROE(5y)47.72%
ROIC(3y)19.47%
ROIC(5y)18.17%
1.3 Margins
ZTS has a Profit Margin of 26.55%. This is amongst the best in the industry. ZTS outperforms 95.26% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
ZTS's Operating Margin of 36.46% is amongst the best of the industry. ZTS outperforms 96.84% of its industry peers.
ZTS's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 70.13%, ZTS is doing good in the industry, outperforming 74.74% of the companies in the same industry.
ZTS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.46% | ||
| PM (TTM) | 26.55% | ||
| GM | 70.13% |
OM growth 3Y2.15%
OM growth 5Y1.93%
PM growth 3Y3.79%
PM growth 5Y2.28%
GM growth 3Y0.52%
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.
Compared to 5 years ago, ZTS has less shares outstanding
The debt/assets ratio for ZTS has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.83 indicates that ZTS is not in any danger for bankruptcy at the moment.
The Altman-Z score of ZTS (7.83) is better than 85.26% of its industry peers.
The Debt to FCF ratio of ZTS is 2.85, which is a good value as it means it would take ZTS, 2.85 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ZTS (2.85) is better than 92.11% of its industry peers.
ZTS has a Debt/Equity ratio of 1.26. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ZTS (1.26) is worse than 74.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 2.85 | ||
| Altman-Z | 7.83 |
ROIC/WACC2.18
WACC9.61%
2.3 Liquidity
A Current Ratio of 3.69 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Current ratio of 3.69. This is comparable to the rest of the industry: ZTS outperforms 55.26% of its industry peers.
A Quick Ratio of 2.27 indicates that ZTS has no problem at all paying its short term obligations.
With a Quick ratio value of 2.27, ZTS perfoms like the industry average, outperforming 48.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.13% 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 11.12% yearly.
Looking at the last year, ZTS shows a quite strong growth in Revenue. The Revenue has grown by 9.33% in the last year.
The Revenue has been growing slightly by 7.96% on average over the past years.
EPS 1Y (TTM)10.13%
EPS 3Y11.38%
EPS 5Y11.12%
EPS Q2Q%16.18%
Revenue 1Y (TTM)9.33%
Revenue growth 3Y8.58%
Revenue growth 5Y7.96%
Sales Q2Q%11.02%
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 10.29% on average per year.
The Revenue is expected to grow by 6.52% on average over the next years.
EPS Next Y11.67%
EPS Next 2Y10.07%
EPS Next 3Y10.38%
EPS Next 5Y10.29%
Revenue Next Year8.55%
Revenue Next 2Y6.72%
Revenue Next 3Y6.74%
Revenue Next 5Y6.52%
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 28.36, which means the current valuation is very expensive for ZTS.
Based on the Price/Earnings ratio, ZTS is valued cheaper than 81.05% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (27.20), we can say ZTS is valued inline with the index average.
With a Price/Forward Earnings ratio of 25.35, ZTS can be considered very expensive at the moment.
78.95% of the companies in the same industry are more expensive than ZTS, based on the Price/Forward Earnings ratio.
ZTS is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.36 | ||
| Fwd PE | 25.35 |
4.2 Price Multiples
79.47% 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 81.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.94 | ||
| EV/EBITDA | 20.65 |
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)2.43
PEG (5Y)2.55
EPS Next 2Y10.07%
EPS Next 3Y10.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.22%, ZTS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.42, ZTS pays a better dividend. On top of this ZTS pays more dividend than 90.53% of the companies listed in the same industry.
With a Dividend Yield of 1.22, ZTS pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
The dividend of ZTS is nicely growing with an annual growth rate of 24.43%!
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 Years11
Div Non Decr Years11
5.3 Sustainability
31.44% of the earnings are spent on dividend by ZTS. This is a low number and sustainable payout ratio.
The dividend of ZTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.44%
EPS Next 2Y10.07%
EPS Next 3Y10.38%
ZOETIS INC
NYSE:ZTS (12/23/2024, 10:07:26 AM)
163.375
-1.47 (-0.89%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners95.93%
Inst Owner Change-0.05%
Ins Owners0.05%
Ins Owner Change-0.28%
Market Cap73.71B
Analysts81.74
Price Target222.28 (36.06%)
Short Float %1.22%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
Dividend Growth(5Y)24.43%
DP31.44%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.71%
Min EPS beat(2)3.91%
Max EPS beat(2)7.51%
EPS beat(4)3
Avg EPS beat(4)1.69%
Min EPS beat(4)-6.94%
Max EPS beat(4)7.51%
EPS beat(8)6
Avg EPS beat(8)2.95%
EPS beat(12)8
Avg EPS beat(12)2.27%
EPS beat(16)12
Avg EPS beat(16)4.57%
Revenue beat(2)2
Avg Revenue beat(2)2.24%
Min Revenue beat(2)1.16%
Max Revenue beat(2)3.33%
Revenue beat(4)3
Avg Revenue beat(4)1.53%
Min Revenue beat(4)-0.05%
Max Revenue beat(4)3.33%
Revenue beat(8)4
Avg Revenue beat(8)0.33%
Revenue beat(12)5
Avg Revenue beat(12)-0.19%
Revenue beat(16)9
Avg Revenue beat(16)0.99%
PT rev (1m)-0.31%
PT rev (3m)-0.65%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.72%
EPS NY rev (1m)0.36%
EPS NY rev (3m)1.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.68%
Revenue NY rev (1m)0.27%
Revenue NY rev (3m)0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.36 | ||
| Fwd PE | 25.35 | ||
| P/S | 8.05 | ||
| P/FCF | 31.94 | ||
| P/OCF | 25.03 | ||
| P/B | 14.08 | ||
| P/tB | 56.53 | ||
| EV/EBITDA | 20.65 |
EPS(TTM)5.76
EY3.53%
EPS(NY)6.45
Fwd EY3.95%
FCF(TTM)5.12
FCFY3.13%
OCF(TTM)6.53
OCFY4%
SpS20.29
BVpS11.6
TBVpS2.89
PEG (NY)2.43
PEG (5Y)2.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.93% | ||
| ROE | 46.43% | ||
| ROCE | 26.37% | ||
| ROIC | 20.99% | ||
| ROICexc | 24.27% | ||
| ROICexgc | 37.86% | ||
| OM | 36.46% | ||
| PM (TTM) | 26.55% | ||
| GM | 70.13% | ||
| FCFM | 25.22% |
ROA(3y)15.08%
ROA(5y)14.05%
ROE(3y)46.58%
ROE(5y)47.72%
ROIC(3y)19.47%
ROIC(5y)18.17%
ROICexc(3y)26.18%
ROICexc(5y)24.48%
ROICexgc(3y)49.18%
ROICexgc(5y)49.79%
ROCE(3y)24.47%
ROCE(5y)22.84%
ROICexcg growth 3Y-9.2%
ROICexcg growth 5Y-3.26%
ROICexc growth 3Y1.07%
ROICexc growth 5Y4.11%
OM growth 3Y2.15%
OM growth 5Y1.93%
PM growth 3Y3.79%
PM growth 5Y2.28%
GM growth 3Y0.52%
GM growth 5Y0.81%
F-Score7
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 2.85 | ||
| Debt/EBITDA | 1.71 | ||
| Cap/Depr | 127.4% | ||
| Cap/Sales | 6.96% | ||
| Interest Coverage | 12.13 | ||
| Cash Conversion | 76.75% | ||
| Profit Quality | 94.98% | ||
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.27 | ||
| Altman-Z | 7.83 |
F-Score7
WACC9.61%
ROIC/WACC2.18
Cap/Depr(3y)127.19%
Cap/Depr(5y)119.19%
Cap/Sales(3y)7.32%
Cap/Sales(5y)7.22%
Profit Quality(3y)72.37%
Profit Quality(5y)81.65%
High Growth Momentum
Growth
EPS 1Y (TTM)10.13%
EPS 3Y11.38%
EPS 5Y11.12%
EPS Q2Q%16.18%
EPS Next Y11.67%
EPS Next 2Y10.07%
EPS Next 3Y10.38%
EPS Next 5Y10.29%
Revenue 1Y (TTM)9.33%
Revenue growth 3Y8.58%
Revenue growth 5Y7.96%
Sales Q2Q%11.02%
Revenue Next Year8.55%
Revenue Next 2Y6.72%
Revenue Next 3Y6.74%
Revenue Next 5Y6.52%
EBIT growth 1Y8.1%
EBIT growth 3Y10.91%
EBIT growth 5Y10.05%
EBIT Next Year21.07%
EBIT Next 3Y12.28%
EBIT Next 5Y9.98%
FCF growth 1Y82.16%
FCF growth 3Y-1.05%
FCF growth 5Y2.23%
OCF growth 1Y59.19%
OCF growth 3Y3.44%
OCF growth 5Y5.62%