ZOETIS INC (ZTS) Stock Fundamental Analysis
USA - NYSE:ZTS - US98978V1035 - Common Stock
144.09 USD
-0.01 (-0.01%)
144.102 USD
+0.01 (+0.01%)
ZTS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 192 industry peers in the Pharmaceuticals industry. While ZTS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ZTS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ZTS was profitable.
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
ZTS has a better Return On Assets (18.04%) than 96.88% of its industry peers.
ZTS's Return On Equity of 52.48% is amongst the best of the industry. ZTS outperforms 97.92% of its industry peers.
ZTS has a Return On Invested Capital of 25.36%. This is amongst the best in the industry. ZTS outperforms 97.40% of its industry peers.
ZTS had an Average Return On Invested Capital over the past 3 years of 21.64%. This is significantly above the industry average of 15.41%.
The 3 year average ROIC (21.64%) for ZTS is below the current ROIC(25.36%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.04% | ||
| ROE | 52.48% | ||
| ROIC | 25.36% |
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's Profit Margin of 27.83% is amongst the best of the industry. ZTS outperforms 96.88% of its industry peers.
ZTS's Profit Margin has improved in the last couple of years.
The Operating Margin of ZTS (37.69%) is better than 96.88% of its industry peers.
In the last couple of years the Operating Margin of ZTS has grown nicely.
ZTS has a better Gross Margin (71.50%) than 78.65% of its industry peers.
ZTS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.69% | ||
| PM (TTM) | 27.83% | ||
| GM | 71.5% |
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.
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
ZTS has a worse debt/assets ratio than last year.
2.2 Solvency
ZTS has an Altman-Z score of 6.94. This indicates that ZTS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZTS (6.94) is better than 80.73% of its industry peers.
ZTS has a debt to FCF ratio of 2.97. This is a good value and a sign of high solvency as ZTS would need 2.97 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.97, ZTS belongs to the top of the industry, outperforming 90.10% of the companies in the same industry.
ZTS has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
ZTS has a Debt to Equity ratio of 1.05. This is in the lower half of the industry: ZTS underperforms 72.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 6.94 |
ROIC/WACC2.93
WACC8.66%
2.3 Liquidity
ZTS has a Current Ratio of 1.76. 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 1.76 is on the low side compared to the rest of the industry. ZTS is outperformed by 65.10% of its industry peers.
A Quick Ratio of 1.04 indicates that ZTS should not have too much problems paying its short term obligations.
The Quick ratio of ZTS (1.04) is worse than 73.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.27% over the past year.
ZTS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.22% yearly.
The Revenue has been growing slightly by 5.27% in the past year.
The Revenue has been growing by 8.14% on average over the past years. This is quite good.
EPS 1Y (TTM)12.27%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%12.82%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%4.19%
3.2 Future
The Earnings Per Share is expected to grow by 9.00% on average over the next years. This is quite good.
Based on estimates for the next years, ZTS will show a small growth in Revenue. The Revenue will grow by 5.30% on average per year.
EPS Next Y8.41%
EPS Next 2Y8.37%
EPS Next 3Y8.78%
EPS Next 5Y9%
Revenue Next Year2.87%
Revenue Next 2Y4.37%
Revenue Next 3Y4.8%
Revenue Next 5Y5.3%
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 23.17 indicates a rather expensive valuation of ZTS.
ZTS's Price/Earnings ratio is rather cheap when compared to the industry. ZTS is cheaper than 80.73% of the companies in the same industry.
When comparing the Price/Earnings ratio of ZTS to the average of the S&P500 Index (26.10), we can say ZTS is valued inline with the index average.
A Price/Forward Earnings ratio of 20.73 indicates a rather expensive valuation of ZTS.
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.
ZTS's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.17 | ||
| Fwd PE | 20.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZTS is valued cheaper than 81.25% 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 | 28.78 | ||
| EV/EBITDA | 17.15 |
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)2.76
PEG (5Y)2.27
EPS Next 2Y8.37%
EPS Next 3Y8.78%
5. Dividend
5.1 Amount
ZTS has a Yearly Dividend Yield of 1.31%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.32, ZTS pays a better dividend. On top of this ZTS pays more dividend than 91.67% of the companies listed in the same industry.
With a Dividend Yield of 1.31, ZTS pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
5.2 History
On average, the dividend of ZTS grows each year by 21.42%, 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)21.42%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
ZTS pays out 32.08% 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.
DP32.08%
EPS Next 2Y8.37%
EPS Next 3Y8.78%
144.09
-0.01 (-0.01%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners98.55%
Inst Owner Change-0.04%
Ins Owners0.06%
Ins Owner Change-0.24%
Market Cap63.86B
Revenue(TTM)9.38B
Net Income(TTM)2.61B
Analysts79.17
Price Target195.43 (35.63%)
Short Float %1.97%
Short Ratio3.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend1.73
Dividend Growth(5Y)21.42%
DP32.08%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.46%
Min EPS beat(2)5.17%
Max EPS beat(2)7.75%
EPS beat(4)4
Avg EPS beat(4)6.02%
Min EPS beat(4)3.63%
Max EPS beat(4)7.75%
EPS beat(8)6
Avg EPS beat(8)2.8%
EPS beat(12)9
Avg EPS beat(12)3.1%
EPS beat(16)12
Avg EPS beat(16)3.49%
Revenue beat(2)2
Avg Revenue beat(2)0.74%
Min Revenue beat(2)0.36%
Max Revenue beat(2)1.11%
Revenue beat(4)3
Avg Revenue beat(4)1.14%
Min Revenue beat(4)-0.26%
Max Revenue beat(4)3.33%
Revenue beat(8)5
Avg Revenue beat(8)0.65%
Revenue beat(12)6
Avg Revenue beat(12)-0.08%
Revenue beat(16)8
Avg Revenue beat(16)0.06%
PT rev (1m)-0.1%
PT rev (3m)-2.6%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)-1.97%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)2.08%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.17 | ||
| Fwd PE | 20.73 | ||
| P/S | 6.8 | ||
| P/FCF | 28.78 | ||
| P/OCF | 21.8 | ||
| P/B | 12.83 | ||
| P/tB | 55.82 | ||
| EV/EBITDA | 17.15 |
EPS(TTM)6.22
EY4.32%
EPS(NY)6.95
Fwd EY4.82%
FCF(TTM)5.01
FCFY3.47%
OCF(TTM)6.61
OCFY4.59%
SpS21.18
BVpS11.23
TBVpS2.58
PEG (NY)2.76
PEG (5Y)2.27
Graham Number39.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.04% | ||
| ROE | 52.48% | ||
| ROCE | 31.83% | ||
| ROIC | 25.36% | ||
| ROICexc | 29.12% | ||
| ROICexgc | 48.22% | ||
| OM | 37.69% | ||
| PM (TTM) | 27.83% | ||
| GM | 71.5% | ||
| FCFM | 23.64% |
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%
ROICexgc growth 3Y2.53%
ROICexgc 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 Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 2.97 | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 146.09% | ||
| Cap/Sales | 7.57% | ||
| Interest Coverage | 12.96 | ||
| Cash Conversion | 72.81% | ||
| Profit Quality | 84.95% | ||
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z | 6.94 |
F-Score8
WACC8.66%
ROIC/WACC2.93
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)12.27%
EPS 3Y8%
EPS 5Y10.22%
EPS Q2Q%12.82%
EPS Next Y8.41%
EPS Next 2Y8.37%
EPS Next 3Y8.78%
EPS Next 5Y9%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y5.98%
Revenue growth 5Y8.14%
Sales Q2Q%4.19%
Revenue Next Year2.87%
Revenue Next 2Y4.37%
Revenue Next 3Y4.8%
Revenue Next 5Y5.3%
EBIT growth 1Y10.05%
EBIT growth 3Y6.4%
EBIT growth 5Y10.78%
EBIT Next Year17.77%
EBIT Next 3Y10.41%
EBIT Next 5Y8.69%
FCF growth 1Y72.68%
FCF growth 3Y9.8%
FCF growth 5Y11.47%
OCF growth 1Y46.52%
OCF growth 3Y10.09%
OCF growth 5Y10.47%
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.
What is the valuation status of ZOETIS INC (ZTS) stock?
ChartMill assigns a valuation rating of 5 / 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 PE and PB ratios for ZTS stock?
The Price/Earnings (PE) ratio for ZOETIS INC (ZTS) is 23.17 and the Price/Book (PB) ratio is 12.83.
What is the expected EPS growth for ZOETIS INC (ZTS) stock?
The Earnings per Share (EPS) of ZOETIS INC (ZTS) is expected to grow by 8.41% in the next year.