ZOETIS INC (ZTS)
US98978V1035 - Common Stock
We assign a fundamental rating of 7 out of 10 to ZTS. ZTS was compared to 194 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.
In the past 5 years ZTS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of ZTS (16.93%) is better than 97.40% of its industry peers.
ZTS has a Return On Equity of 46.43%. This is amongst the best in the industry. ZTS outperforms 96.88% of its industry peers.
The Return On Invested Capital of ZTS (20.99%) is better than 96.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZTS is significantly below the industry average of 42.22%.
The last Return On Invested Capital (20.99%) for ZTS is above the 3 year average (19.47%), which is a sign of increasing profitability.
| 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
The Profit Margin of ZTS (26.55%) is better than 96.35% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
ZTS has a Operating Margin of 36.46%. This is amongst the best in the industry. ZTS outperforms 97.40% 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 70.13%, ZTS is in the better half of the industry, outperforming 75.00% 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 | 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.
The number of shares outstanding for ZTS has been reduced compared to 5 years ago.
The debt/assets ratio for ZTS has been reduced compared to a year ago.
2.2 Solvency
ZTS has an Altman-Z score of 8.18. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.18, ZTS belongs to the best of the industry, outperforming 83.85% of the companies in the same industry.
ZTS has a debt to FCF ratio of 2.85. This is a good value and a sign of high solvency as ZTS would need 2.85 years to pay back of all of its debts.
The Debt to FCF ratio of ZTS (2.85) is better than 92.19% 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.
ZTS's Debt to Equity ratio of 1.26 is on the low side compared to the rest of the industry. ZTS is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 2.85 | ||
| Altman-Z | 8.18 |
ROIC/WACC2.45
WACC8.57%
2.3 Liquidity
A Current Ratio of 3.69 indicates that ZTS has no problem at all paying its short term obligations.
The Current ratio of ZTS (3.69) is comparable to the rest of the industry.
A Quick Ratio of 2.27 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Quick ratio (2.27) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.27 |
3. Growth
3.1 Past
ZTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.13%, which is quite good.
Measured over the past years, ZTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.12% on average per year.
Looking at the last year, ZTS shows a quite strong growth in Revenue. The Revenue has grown by 9.33% in the last year.
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)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
ZTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.75% yearly.
The Revenue is expected to grow by 6.39% on average over the next years.
EPS Next Y11.26%
EPS Next 2Y10.24%
EPS Next 3Y10.52%
EPS Next 5Y9.75%
Revenue Next Year8.26%
Revenue Next 2Y6.8%
Revenue Next 3Y6.79%
Revenue Next 5Y6.39%
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
Based on the Price/Earnings ratio of 30.68, the valuation of ZTS can be described as expensive.
80.73% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.96, ZTS is valued at the same level.
Based on the Price/Forward Earnings ratio of 27.33, the valuation of ZTS can be described as expensive.
ZTS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 76.56% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.82, ZTS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.68 | ||
| Fwd PE | 27.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued a bit cheaper than 79.69% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ZTS is valued cheaper than 80.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.54 | ||
| EV/EBITDA | 22.05 |
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)2.72
PEG (5Y)2.76
EPS Next 2Y10.24%
EPS Next 3Y10.52%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, ZTS is not a good candidate for dividend investing.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.28. ZTS pays more dividend than 90.63% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, ZTS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
The dividend of ZTS is nicely growing with an annual growth rate of 24.43%!
ZTS has paid a dividend for at least 10 years, which is a reliable track record.
ZTS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)24.43%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
ZTS pays out 31.44% 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.
DP31.44%
EPS Next 2Y10.24%
EPS Next 3Y10.52%
ZOETIS INC
NYSE:ZTS (11/21/2024, 8:04:00 PM)
After market: 176.72 +0.01 (+0.01%)176.71
+1.04 (+0.59%)
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 Cap79.73B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(12)
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PT rev (1m)
PT rev (3m)
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 | 30.68 | ||
| Fwd PE | 27.33 | ||
| 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)2.72
PEG (5Y)2.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.93% | ||
| ROE | 46.43% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 36.46% | ||
| PM (TTM) | 26.55% | ||
| GM | 70.13% | ||
| 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 Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.69 | ||
| Quick Ratio | 2.27 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)10.13%
EPS 3Y11.38%
EPS 5Y
EPS Q2Q%
EPS Next Y11.26%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.33%
Revenue growth 3Y8.58%
Revenue growth 5Y
Sales 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