ZOETIS INC (ZTS) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:ZTS • US98978V1035
124.54 USD
-0.28 (-0.22%)
Last: Feb 2, 2026, 10:51 AM
Taking everything into account, ZTS scores 7 out of 10 in our fundamental rating. 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 correct valuation and a medium growth rate. ZTS also has an excellent dividend rating. This makes ZTS very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year ZTS was profitable.
- ZTS had a positive operating cash flow in the past year.
- ZTS had positive earnings in each of the past 5 years.
- Each year in the past 5 years ZTS had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 17.49%, ZTS belongs to the top of the industry, outperforming 96.34% of the companies in the same industry.
- ZTS has a Return On Equity of 49.11%. This is amongst the best in the industry. ZTS outperforms 97.91% of its industry peers.
- ZTS's Return On Invested Capital of 21.45% is amongst the best of the industry. ZTS outperforms 96.86% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ZTS is significantly above the industry average of 12.82%.
| 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
- ZTS has a Profit Margin of 28.21%. This is amongst the best in the industry. ZTS outperforms 93.72% of its industry peers.
- ZTS's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 38.25%, ZTS belongs to the top of the industry, outperforming 96.86% of the companies in the same industry.
- In the last couple of years the Operating Margin of ZTS has grown nicely.
- ZTS's Gross Margin of 71.71% is fine compared to the rest of the industry. ZTS outperforms 78.53% of its industry peers.
- 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ZTS is creating value.
- Compared to 1 year ago, ZTS has less shares outstanding
- ZTS has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ZTS has a worse debt to assets ratio.
2.2 Solvency
- ZTS has an Altman-Z score of 6.42. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
- ZTS's Altman-Z score of 6.42 is fine compared to the rest of the industry. ZTS outperforms 78.53% of its industry peers.
- The Debt to FCF ratio of ZTS is 3.16, which is a good value as it means it would take ZTS, 3.16 years of fcf income to pay off all of its debts.
- ZTS's Debt to FCF ratio of 3.16 is amongst the best of the industry. ZTS outperforms 89.53% of its industry peers.
- ZTS has a Debt/Equity ratio of 1.31. This is a high value indicating a heavy dependency on external financing.
- ZTS has a worse Debt to Equity ratio (1.31) than 74.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.31 | ||
| Debt/FCF | 3.16 | ||
| Altman-Z | 6.42 |
ROIC/WACC2.31
WACC9.29%
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.
- ZTS has a Quick Ratio of 2.28. This indicates that ZTS is financially healthy and has no problem in meeting its short term obligations.
- ZTS has a Quick ratio (2.28) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.64 | ||
| Quick Ratio | 2.28 |
3. Growth
3.1 Past
- ZTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.07%, 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 10.22% yearly.
- Looking at the last year, ZTS shows a small growth in Revenue. The Revenue has grown by 2.68% in the last year.
- ZTS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.14% yearly.
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
- ZTS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.88% yearly.
- Based on estimates for the next years, ZTS will show a small growth in Revenue. The Revenue will grow by 4.67% on average per year.
EPS Next Y8.17%
EPS Next 2Y7.58%
EPS Next 3Y8.06%
EPS Next 5Y7.88%
Revenue Next Year2.07%
Revenue Next 2Y3.49%
Revenue Next 3Y4.21%
Revenue Next 5Y4.67%
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 decreasing.
- 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
- With a Price/Earnings ratio of 19.64, ZTS is valued on the expensive side.
- Compared to the rest of the industry, the Price/Earnings ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 82.20% of the companies listed in the same industry.
- ZTS is valuated rather cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
- ZTS is valuated rather expensively with a Price/Forward Earnings ratio of 18.18.
- Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than the industry average as 79.06% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (25.57), we can say ZTS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.64 | ||
| Fwd PE | 18.18 |
4.2 Price Multiples
- 83.25% of the companies in the same industry are more expensive than ZTS, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 83.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.5 | ||
| EV/EBITDA | 14.69 |
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)2.4
PEG (5Y)1.92
EPS Next 2Y7.58%
EPS Next 3Y8.06%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.64%, ZTS has a reasonable but not impressive dividend return.
- ZTS's Dividend Yield is rather good when compared to the industry average which is at 0.62. ZTS pays more dividend than 91.10% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, ZTS has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
5.2 History
- The dividend of ZTS is nicely growing with an annual growth rate of 21.42%!
- ZTS has been paying a dividend for at least 10 years, so it has 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)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- 32.55% 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.
DP32.55%
EPS Next 2Y7.58%
EPS Next 3Y8.06%
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.
Can you provide the valuation status for ZOETIS INC?
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 expected EPS growth for ZTS stock?
The Earnings per Share (EPS) of ZOETIS INC (ZTS) is expected to grow by 8.17% in the next year.
Is the dividend of ZOETIS INC sustainable?
The dividend rating of ZOETIS INC (ZTS) is 7 / 10 and the dividend payout ratio is 32.55%.