ZOETIS INC (ZTS)
US98978V1035 - Common Stock
Overall ZTS gets a fundamental rating of 7 out of 10. We evaluated ZTS 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 decent growth rate and is not valued too expensively. These ratings could make ZTS a good candidate 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 (16.93%) is better than 97.40% of its industry peers.
Looking at the Return On Equity, with a value of 46.43%, ZTS belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
ZTS has a better Return On Invested Capital (20.99%) than 95.83% of its industry peers.
ZTS had an Average Return On Invested Capital over the past 3 years of 19.47%. This is significantly below the industry average of 41.78%.
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
With an excellent Profit Margin value of 26.55%, ZTS belongs to the best of the industry, outperforming 95.83% 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 36.46%. This is amongst the best in the industry. ZTS outperforms 97.40% 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 75.00% 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
ZTS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for ZTS has been reduced compared to 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
ZTS has an Altman-Z score of 8.13. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
ZTS's Altman-Z score of 8.13 is amongst the best of the industry. ZTS outperforms 83.33% 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 92.19% 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 74.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.26 | ||
| Debt/FCF | 2.85 | ||
| Altman-Z | 8.13 |
ROIC/WACC2.41
WACC8.7%
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 51.56% of its industry peers.
A Quick Ratio of 2.27 indicates that ZTS has no problem at all paying its short term obligations.
ZTS has a Quick ratio of 2.27. This is comparable to the rest of the industry: ZTS outperforms 43.75% of 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.
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.
ZTS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.96% yearly.
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 9.75% on average per year.
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
With a Price/Earnings ratio of 30.63, ZTS can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ZTS is valued cheaply inside the industry as 80.73% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.94, ZTS is valued at the same level.
Based on the Price/Forward Earnings ratio of 27.29, the valuation of ZTS can be described as expensive.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than the industry average as 76.56% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.03, ZTS is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.63 | ||
| Fwd PE | 27.29 |
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.
80.73% 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 | 34.63 | ||
| EV/EBITDA | 21.84 |
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.
The excellent profitability rating of ZTS may justify a higher PE ratio.
PEG (NY)2.72
PEG (5Y)2.75
EPS Next 2Y10.24%
EPS Next 3Y10.52%
5. Dividend
5.1 Amount
ZTS has a yearly dividend return of 0.99%, which is pretty low.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.11. 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
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
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 2Y10.24%
EPS Next 3Y10.52%
ZOETIS INC
NYSE:ZTS (11/8/2024, 1:14:40 PM)
176.4
+2.15 (+1.23%)
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 Cap79.92B
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
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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)
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Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.63 | ||
| Fwd PE | 27.29 | ||
| 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)2.75
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