ZOETIS INC (ZTS) Stock Fundamental Analysis
USA - NYSE:ZTS - US98978V1035 - Common Stock
121.16 USD
-0.09 (-0.07%)
121.09 USD
-0.07 (-0.06%)
We assign a fundamental rating of 7 out of 10 to ZTS. ZTS was compared to 191 industry peers in the Pharmaceuticals industry. ZTS gets an excellent profitability rating and is at the same time showing great financial health properties. ZTS has a decent growth rate and is not valued too expensively. With these ratings, ZTS could be worth investigating further 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.
Each year in the past 5 years ZTS had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ZTS (17.49%) is better than 96.86% of its industry peers.
With an excellent Return On Equity value of 49.11%, ZTS belongs to the best of the industry, outperforming 97.91% of the companies in the same industry.
ZTS has a better Return On Invested Capital (21.45%) than 96.86% of its industry peers.
ZTS had an Average Return On Invested Capital over the past 3 years of 21.64%. This is significantly above the industry average of 15.35%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.49% | ||
| ROE | 49.11% | ||
| ROIC | 21.45% |
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 28.21%, ZTS belongs to the best of the industry, outperforming 95.29% of the companies in the same industry.
In the last couple of years the Profit Margin of ZTS has grown nicely.
ZTS has a Operating Margin of 38.25%. This is amongst the best in the industry. ZTS outperforms 96.86% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
Looking at the Gross Margin, with a value of 71.71%, ZTS is in the better half of the industry, outperforming 78.53% of the companies in the same industry.
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 | 38.25% | ||
| PM (TTM) | 28.21% | ||
| GM | 71.71% |
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
Compared to 5 years ago, ZTS has less shares outstanding
Compared to 1 year ago, ZTS has a worse debt to assets ratio.
2.2 Solvency
ZTS has an Altman-Z score of 6.34. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZTS (6.34) is better than 80.63% of its industry peers.
ZTS has a debt to FCF ratio of 3.16. This is a good value and a sign of high solvency as ZTS would need 3.16 years to pay back of all of its debts.
ZTS has a better Debt to FCF ratio (3.16) than 89.01% of its industry peers.
A Debt/Equity ratio of 1.31 is on the high side and indicates that ZTS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.31, ZTS is not doing good in the industry: 75.39% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 3.16 | ||
| Altman-Z | 6.34 |
ROIC/WACC2.47
WACC8.67%
2.3 Liquidity
A Current Ratio of 3.64 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Current ratio (3.64) which is comparable to the rest of the industry.
A Quick Ratio of 2.28 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Quick ratio (2.28) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.64 | ||
| Quick Ratio | 2.28 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.07% over the past year.
The Earnings Per Share has been growing by 10.22% 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 2.68%.
The Revenue has been growing by 8.14% on average over the past years. This is quite good.
EPS 1Y (TTM)10.07%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.59%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%0.5%
3.2 Future
The Earnings Per Share is expected to grow by 8.61% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.06% on average over the next years.
EPS Next Y8.38%
EPS Next 2Y8.35%
EPS Next 3Y8.76%
EPS Next 5Y8.61%
Revenue Next Year2.86%
Revenue Next 2Y4.36%
Revenue Next 3Y4.79%
Revenue Next 5Y5.06%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.11, the valuation of ZTS can be described as rather expensive.
81.68% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
ZTS is valuated rather cheaply when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.43, the valuation of ZTS can be described as rather expensive.
ZTS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 79.06% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 34.57. ZTS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.11 | ||
| Fwd PE | 17.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued cheaper than 82.20% of the companies in the same industry.
82.72% 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 | 23.97 | ||
| EV/EBITDA | 14.37 |
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)2.28
PEG (5Y)1.87
EPS Next 2Y8.35%
EPS Next 3Y8.76%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.31%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of ZTS has falen by -21.38%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 6.95, ZTS pays a better dividend. On top of this ZTS pays more dividend than 91.62% of the companies listed in the same industry.
With a Dividend Yield of 1.31, ZTS pays less dividend than the S&P500 average, which is at 2.36.
| 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 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)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
ZTS pays out 32.55% of its income as dividend. This is a sustainable payout ratio.
ZTS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP32.55%
EPS Next 2Y8.35%
EPS Next 3Y8.76%
121.16
-0.09 (-0.07%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners98.55%
Inst Owner Change-0.87%
Ins Owners0.06%
Ins Owner Change-0.24%
Market Cap53.70B
Revenue(TTM)9.40B
Net Income(TTM)2.65B
Analysts79.17
Price Target193.21 (59.47%)
Short Float %1.97%
Short Ratio3.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.55%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.77%
Min EPS beat(2)3.79%
Max EPS beat(2)7.75%
EPS beat(4)4
Avg EPS beat(4)5.09%
Min EPS beat(4)3.63%
Max EPS beat(4)7.75%
EPS beat(8)7
Avg EPS beat(8)3.39%
EPS beat(12)10
Avg EPS beat(12)3.67%
EPS beat(16)12
Avg EPS beat(16)2.98%
Revenue beat(2)1
Avg Revenue beat(2)-0.16%
Min Revenue beat(2)-1.44%
Max Revenue beat(2)1.11%
Revenue beat(4)2
Avg Revenue beat(4)-0.06%
Min Revenue beat(4)-1.44%
Max Revenue beat(4)1.11%
Revenue beat(8)5
Avg Revenue beat(8)0.74%
Revenue beat(12)6
Avg Revenue beat(12)0.2%
Revenue beat(16)7
Avg Revenue beat(16)-0.15%
PT rev (1m)-1.14%
PT rev (3m)-1.62%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)-2.1%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)2.05%
Revenue NQ rev (1m)-0.41%
Revenue NQ rev (3m)-1.18%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.11 | ||
| Fwd PE | 17.43 | ||
| P/S | 5.71 | ||
| P/FCF | 23.97 | ||
| P/OCF | 18.41 | ||
| P/B | 9.95 | ||
| P/tB | 33.69 | ||
| EV/EBITDA | 14.37 |
EPS(TTM)6.34
EY5.23%
EPS(NY)6.95
Fwd EY5.74%
FCF(TTM)5.05
FCFY4.17%
OCF(TTM)6.58
OCFY5.43%
SpS21.2
BVpS12.18
TBVpS3.6
PEG (NY)2.28
PEG (5Y)1.87
Graham Number41.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.49% | ||
| ROE | 49.11% | ||
| ROCE | 26.92% | ||
| ROIC | 21.45% | ||
| ROICexc | 25.41% | ||
| ROICexgc | 38.35% | ||
| OM | 38.25% | ||
| PM (TTM) | 28.21% | ||
| GM | 71.71% | ||
| FCFM | 23.84% |
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%
ROICexgc growth 3Y2.53%
ROICexgc 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-Score6
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 3.16 | ||
| Debt/EBITDA | 1.73 | ||
| Cap/Depr | 138.24% | ||
| Cap/Sales | 7.19% | ||
| Interest Coverage | 12.22 | ||
| Cash Conversion | 71.42% | ||
| Profit Quality | 84.5% | ||
| Current Ratio | 3.64 | ||
| Quick Ratio | 2.28 | ||
| Altman-Z | 6.34 |
F-Score6
WACC8.67%
ROIC/WACC2.47
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)10.07%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.59%
EPS Next Y8.38%
EPS Next 2Y8.35%
EPS Next 3Y8.76%
EPS Next 5Y8.61%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%0.5%
Revenue Next Year2.86%
Revenue Next 2Y4.36%
Revenue Next 3Y4.79%
Revenue Next 5Y5.06%
EBIT growth 1Y7.7%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year17.77%
EBIT Next 3Y10.41%
EBIT Next 5Y8.66%
FCF growth 1Y50.13%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y32.73%
OCF growth 3Y10.09%
OCF growth 5Y10.47%
ZOETIS INC / ZTS FAQ
What is the ChartMill fundamental rating of ZOETIS INC (ZTS) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ZTS.
What is the valuation status of ZOETIS INC (ZTS) stock?
ChartMill assigns a valuation rating of 6 / 10 to ZOETIS INC (ZTS). This can be considered as Fairly Valued.
How profitable is ZOETIS INC (ZTS) stock?
ZOETIS INC (ZTS) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for ZTS stock?
The Price/Earnings (PE) ratio for ZOETIS INC (ZTS) is 19.11 and the Price/Book (PB) ratio is 9.95.
What is the expected EPS growth for ZOETIS INC (ZTS) stock?
The Earnings per Share (EPS) of ZOETIS INC (ZTS) is expected to grow by 8.38% in the next year.