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ZOETIS INC (ZTS) Stock Fundamental Analysis

NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock

166.63  -0.9 (-0.54%)

After market: 166.63 0 (0%)

Fundamental Rating

7

Overall ZTS gets a fundamental rating of 7 out of 10. We evaluated ZTS against 195 industry peers in the Pharmaceuticals industry. Both the health and profitability get an excellent rating, making ZTS a very profitable company, without any liquidiy or solvency issues. ZTS is not valued too expensively and it also shows a decent growth rate. These ratings would make ZTS suitable for quality investing!


Dividend Valuation Growth Profitability Health

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8

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.
ZTS Yearly Net Income VS EBIT VS OCF VS FCFZTS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

1.2 Ratios

The Return On Assets of ZTS (16.93%) is better than 97.31% of its industry peers.
The Return On Equity of ZTS (46.43%) is better than 97.31% of its industry peers.
The Return On Invested Capital of ZTS (20.99%) is better than 96.77% 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 43.99%.
The 3 year average ROIC (19.47%) for ZTS is below the current ROIC(20.99%), indicating increased profibility in the last year.
Industry RankSector 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%
ZTS Yearly ROA, ROE, ROICZTS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

1.3 Margins

With an excellent Profit Margin value of 26.55%, ZTS belongs to the best of the industry, outperforming 95.16% of the companies in the same industry.
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 96.77% of its industry peers.
ZTS's Operating Margin has improved in the last couple of years.
ZTS has a better Gross Margin (70.13%) than 74.19% 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 RankSector 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%
ZTS Yearly Profit, Operating, Gross MarginsZTS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

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7

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
ZTS has less shares outstanding than it did 5 years ago.
ZTS has a better debt/assets ratio than last year.
ZTS Yearly Shares OutstandingZTS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M
ZTS Yearly Total Debt VS Total AssetsZTS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B

2.2 Solvency

ZTS has an Altman-Z score of 7.88. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZTS (7.88) is better than 84.41% 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 91.94% of its industry peers.
A Debt/Equity ratio of 1.26 is on the high side and indicates that ZTS has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.26, ZTS is doing worse than 74.73% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.26
Debt/FCF 2.85
Altman-Z 7.88
ROIC/WACC2.01
WACC10.45%
ZTS Yearly LT Debt VS Equity VS FCFZTS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.3 Liquidity

A Current Ratio of 3.69 indicates that ZTS has no problem at all paying its short term obligations.
With a Current ratio value of 3.69, ZTS perfoms like the industry average, outperforming 54.30% of the companies in the same 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 RankSector Rank
Current Ratio 3.69
Quick Ratio 2.27
ZTS Yearly Current Assets VS Current LiabilitesZTS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

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5

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

The Earnings Per Share is expected to grow by 10.29% on average over the next years. This is quite good.
ZTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.51% yearly.
EPS Next Y11.67%
EPS Next 2Y10.07%
EPS Next 3Y10.38%
EPS Next 5Y10.29%
Revenue Next Year8.55%
Revenue Next 2Y6.7%
Revenue Next 3Y6.72%
Revenue Next 5Y6.51%

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.
ZTS Yearly Revenue VS EstimatesZTS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5B 10B
ZTS Yearly EPS VS EstimatesZTS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6 8

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5

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 28.93, which means the current valuation is very expensive for ZTS.
81.18% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (28.19), we can say ZTS is valued inline with the index average.
The Price/Forward Earnings ratio is 25.85, which means the current valuation is very expensive for ZTS.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than 79.03% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ZTS to the average of the S&P500 Index (24.37), we can say ZTS is valued inline with the index average.
Industry RankSector Rank
PE 28.93
Fwd PE 25.85
ZTS Price Earnings VS Forward Price EarningsZTS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

ZTS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ZTS is cheaper than 79.57% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTS indicates a rather cheap valuation: ZTS is cheaper than 81.72% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 32.57
EV/EBITDA 20.86
ZTS Per share dataZTS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20

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)2.48
PEG (5Y)2.6
EPS Next 2Y10.07%
EPS Next 3Y10.38%

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6

5. Dividend

5.1 Amount

ZTS has a Yearly Dividend Yield of 1.18%.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.09. ZTS pays more dividend than 90.32% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, ZTS's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.18%

5.2 History

On average, the dividend of ZTS grows each year by 24.43%, 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)24.43%
Div Incr Years11
Div Non Decr Years11
ZTS Yearly Dividends per shareZTS Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5

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%
ZTS Yearly Income VS Free CF VS DividendZTS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B
ZTS Dividend Payout.ZTS Dividend Payout, showing the Payout Ratio.ZTS Dividend Payout.PayoutRetained Earnings

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ZOETIS INC

NYSE:ZTS (1/22/2025, 8:04:00 PM)

After market: 166.63 0 (0%)

166.63

-0.9 (-0.54%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)11-04 2024-11-04/bmo
Earnings (Next)02-13 2025-02-13/amc
Inst Owners95.93%
Inst Owner Change-0.29%
Ins Owners0.05%
Ins Owner Change-2.42%
Market Cap75.18B
Analysts81.6
Price Target221.32 (32.82%)
Short Float %1.55%
Short Ratio2.67
Dividend
Industry RankSector Rank
Dividend Yield 1.18%
Yearly Dividend1.5
Dividend Growth(5Y)24.43%
DP31.44%
Div Incr Years11
Div Non Decr Years11
Ex-Date01-21 2025-01-21 (0.5)
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)-0.43%
PT rev (3m)-0.28%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.72%
EPS NY rev (1m)0%
EPS NY rev (3m)1.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.81%
Valuation
Industry RankSector Rank
PE 28.93
Fwd PE 25.85
P/S 8.21
P/FCF 32.57
P/OCF 25.53
P/B 14.36
P/tB 57.65
EV/EBITDA 20.86
EPS(TTM)5.76
EY3.46%
EPS(NY)6.45
Fwd EY3.87%
FCF(TTM)5.12
FCFY3.07%
OCF(TTM)6.53
OCFY3.92%
SpS20.29
BVpS11.6
TBVpS2.89
PEG (NY)2.48
PEG (5Y)2.6
Profitability
Industry RankSector 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 RankSector 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 7.88
F-Score7
WACC10.45%
ROIC/WACC2.01
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 2Y6.7%
Revenue Next 3Y6.72%
Revenue Next 5Y6.51%
EBIT growth 1Y8.1%
EBIT growth 3Y10.91%
EBIT growth 5Y10.05%
EBIT Next Year21.43%
EBIT Next 3Y12.25%
EBIT Next 5Y10.16%
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%