ZOETIS INC (ZTS) Stock Fundamental Analysis
NYSE:ZTS - New York Stock Exchange, Inc. - US98978V1035 - Common Stock - Currency: USD
Overall ZTS gets a fundamental rating of 6 out of 10. We evaluated ZTS against 195 industry peers in the Pharmaceuticals industry. ZTS has an excellent profitability rating, but there are some minor concerns on its financial health. ZTS has a decent growth rate and is not valued too expensively.
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.
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
With an excellent Return On Assets value of 17.86%, ZTS belongs to the best of the industry, outperforming 97.95% of the companies in the same industry.
The Return On Equity of ZTS (54.09%) is better than 97.95% of its industry peers.
With an excellent Return On Invested Capital value of 25.63%, ZTS belongs to the best of the industry, outperforming 97.44% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ZTS is significantly above the industry average of 14.87%.
The 3 year average ROIC (21.64%) for ZTS is below the current ROIC(25.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROIC | 25.63% |
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 27.12%. This is amongst the best in the industry. ZTS outperforms 96.41% of its industry peers.
In the last couple of years the Profit Margin of ZTS has grown nicely.
With an excellent Operating Margin value of 37.11%, ZTS belongs to the best of the industry, outperforming 96.92% of the companies in the same industry.
ZTS's Operating Margin has improved in the last couple of years.
ZTS's Gross Margin of 70.98% is fine compared to the rest of the industry. ZTS outperforms 79.49% 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 | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% |
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
ZTS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, ZTS has a worse debt to assets ratio.
2.2 Solvency
ZTS has an Altman-Z score of 7.41. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 7.41, ZTS belongs to the best of the industry, outperforming 84.10% of the companies in the same industry.
The Debt to FCF ratio of ZTS is 2.88, which is a good value as it means it would take ZTS, 2.88 years of fcf income to pay off all of its debts.
ZTS has a Debt to FCF ratio of 2.88. This is amongst the best in the industry. ZTS outperforms 91.28% of its industry peers.
ZTS has a Debt/Equity ratio of 1.12. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.12, ZTS is doing worse than 72.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Altman-Z | 7.41 |
ROIC/WACC2.66
WACC9.62%
2.3 Liquidity
ZTS has a Current Ratio of 1.74. This is a normal value and indicates that ZTS is financially healthy and should not expect problems in meeting its short term obligations.
ZTS's Current ratio of 1.74 is on the low side compared to the rest of the industry. ZTS is outperformed by 65.13% of its industry peers.
A Quick Ratio of 1.04 indicates that ZTS should not have too much problems paying its short term obligations.
ZTS's Quick ratio of 1.04 is on the low side compared to the rest of the industry. ZTS is outperformed by 73.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.69% over the past year.
Measured over the past years, ZTS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.22% on average per year.
The Revenue has been growing slightly by 6.32% in the past 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)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
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 9.50% on average per year.
Based on estimates for the next years, ZTS will show a small growth in Revenue. The Revenue will grow by 5.61% on average per year.
EPS Next Y6.28%
EPS Next 2Y7.69%
EPS Next 3Y8.42%
EPS Next 5Y9.5%
Revenue Next Year2.57%
Revenue Next 2Y4.33%
Revenue Next 3Y4.81%
Revenue Next 5Y5.61%
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
A Price/Earnings ratio of 26.44 indicates a quite expensive valuation of ZTS.
81.03% of the companies in the same industry are more expensive than ZTS, based on the Price/Earnings ratio.
ZTS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.45.
The Price/Forward Earnings ratio is 23.18, which indicates a rather expensive current valuation of ZTS.
Based on the Price/Forward Earnings ratio, ZTS is valued a bit cheaper than 71.79% of the companies in the same industry.
ZTS's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.44 | ||
| Fwd PE | 23.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued a bit cheaper than 80.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZTS indicates a somewhat cheap valuation: ZTS is cheaper than 80.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.07 | ||
| EV/EBITDA | 19.24 |
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)4.21
PEG (5Y)2.59
EPS Next 2Y7.69%
EPS Next 3Y8.42%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.26%.
ZTS's Dividend Yield is rather good when compared to the industry average which is at 4.12. ZTS pays more dividend than 90.77% of the companies in the same industry.
With a Dividend Yield of 1.26, ZTS pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
5.2 History
On average, the dividend of ZTS grows each year by 21.42%, 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)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
ZTS pays out 32.25% of its income as dividend. This is a sustainable payout ratio.
The dividend of ZTS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP32.25%
EPS Next 2Y7.69%
EPS Next 3Y8.42%
159.18
+0.1 (+0.06%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners96.42%
Inst Owner Change0.83%
Ins Owners0.06%
Ins Owner Change5.03%
Market Cap70.87B
Analysts80.83
Price Target200.66 (26.06%)
Short Float %1.96%
Short Ratio2.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.25%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.4%
Min EPS beat(2)3.63%
Max EPS beat(2)5.17%
EPS beat(4)4
Avg EPS beat(4)5.06%
Min EPS beat(4)3.63%
Max EPS beat(4)7.51%
EPS beat(8)6
Avg EPS beat(8)2.6%
EPS beat(12)8
Avg EPS beat(12)2.24%
EPS beat(16)12
Avg EPS beat(16)3.55%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)0.36%
Revenue beat(4)3
Avg Revenue beat(4)1.15%
Min Revenue beat(4)-0.26%
Max Revenue beat(4)3.33%
Revenue beat(8)4
Avg Revenue beat(8)0.48%
Revenue beat(12)5
Avg Revenue beat(12)-0.19%
Revenue beat(16)8
Avg Revenue beat(16)0.35%
PT rev (1m)-1.14%
PT rev (3m)-4.44%
EPS NQ rev (1m)0.24%
EPS NQ rev (3m)0.78%
EPS NY rev (1m)0.15%
EPS NY rev (3m)1.8%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)1.08%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)1.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.44 | ||
| Fwd PE | 23.18 | ||
| P/S | 7.63 | ||
| P/FCF | 31.07 | ||
| P/OCF | 24.06 | ||
| P/B | 15.22 | ||
| P/tB | 82.69 | ||
| EV/EBITDA | 19.24 |
EPS(TTM)6.02
EY3.78%
EPS(NY)6.87
Fwd EY4.31%
FCF(TTM)5.12
FCFY3.22%
OCF(TTM)6.61
OCFY4.16%
SpS20.86
BVpS10.46
TBVpS1.92
PEG (NY)4.21
PEG (5Y)2.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.86% | ||
| ROE | 54.09% | ||
| ROCE | 32.17% | ||
| ROIC | 25.63% | ||
| ROICexc | 30.53% | ||
| ROICexgc | 52.86% | ||
| OM | 37.11% | ||
| PM (TTM) | 27.12% | ||
| GM | 70.98% | ||
| FCFM | 24.56% |
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%
ROICexcg growth 3Y2.53%
ROICexcg 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-Score8
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.12 | ||
| Debt/FCF | 2.88 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 135.51% | ||
| Cap/Sales | 7.15% | ||
| Interest Coverage | 12.58 | ||
| Cash Conversion | 74.82% | ||
| Profit Quality | 90.59% | ||
| Current Ratio | 1.74 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 7.41 |
F-Score8
WACC9.62%
ROIC/WACC2.66
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)11.69%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%7.25%
EPS Next Y6.28%
EPS Next 2Y7.69%
EPS Next 3Y8.42%
EPS Next 5Y9.5%
Revenue 1Y (TTM)6.32%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%1.37%
Revenue Next Year2.57%
Revenue Next 2Y4.33%
Revenue Next 3Y4.81%
Revenue Next 5Y5.61%
EBIT growth 1Y9.64%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year16.87%
EBIT Next 3Y10.58%
EBIT Next 5Y9.07%
FCF growth 1Y56.45%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y36.85%
OCF growth 3Y10.09%
OCF growth 5Y10.47%