NYSE:ZTS

Stock Analysis Report

Executive Summary

Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally.


Snowflake Analysis

Adequate balance sheet with proven track record.


Similar Companies

Share Price & News

How has Zoetis's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ZTS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

ZTS

1.8%

US Pharmaceuticals

1.2%

US Market


1 Year Return

66.7%

ZTS

13.1%

US Pharmaceuticals

24.2%

US Market

Return vs Industry: ZTS exceeded the US Pharmaceuticals industry which returned 12.6% over the past year.

Return vs Market: ZTS exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

ZTSIndustryMarket
7 Day2.1%1.8%1.2%
30 Day5.6%2.8%3.5%
90 Day15.1%16.1%11.7%
1 Year67.7%66.7%16.0%13.1%26.9%24.2%
3 Year165.6%160.6%41.7%31.5%53.0%43.2%
5 Year235.1%223.7%29.1%15.5%75.3%56.0%

Price Volatility Vs. Market

How volatile is Zoetis's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zoetis undervalued compared to its fair value and its price relative to the market?

45.97x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ZTS ($137.27) is trading above our estimate of fair value ($112.44)

Significantly Below Fair Value: ZTS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ZTS is poor value based on its PE Ratio (45x) compared to the Pharmaceuticals industry average (24.9x).

PE vs Market: ZTS is poor value based on its PE Ratio (45x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ZTS is poor value based on its PEG Ratio (4.3x)


Price to Book Ratio

PB vs Industry: ZTS is overvalued based on its PB Ratio (24.4x) compared to the US Pharmaceuticals industry average (3.3x).


Next Steps

Future Growth

How is Zoetis forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

10.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZTS's forecast earnings growth (10.5% per year) is above the savings rate (1.7%).

Earnings vs Market: ZTS's earnings (10.5% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: ZTS's earnings are forecast to grow, but not significantly.

Revenue vs Market: ZTS's revenue (6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ZTS's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ZTS's Return on Equity is forecast to be very high in 3 years time (52.3%).


Next Steps

Past Performance

How has Zoetis performed over the past 5 years?

25.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ZTS has high quality earnings.

Growing Profit Margin: ZTS's current net profit margins (23.8%) are higher than last year (20.3%).


Past Earnings Growth Analysis

Earnings Trend: ZTS's earnings have grown significantly by 25.2% per year over the past 5 years.

Accelerating Growth: ZTS's earnings growth over the past year (25.5%) exceeds its 5-year average (25.2% per year).

Earnings vs Industry: ZTS earnings growth over the past year (25.5%) underperformed the Pharmaceuticals industry 36.8%.


Return on Equity

High ROE: Whilst ZTS's Return on Equity (54.56%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zoetis's financial position?


Financial Position Analysis

Short Term Liabilities: ZTS's short term assets ($4.6B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: ZTS's short term assets ($4.6B) do not cover its long term liabilities ($7.5B).


Debt to Equity History and Analysis

Debt Level: ZTS's debt to equity ratio (241%) is considered high.

Reducing Debt: ZTS's debt to equity ratio has reduced from 263.2% to 241% over the past 5 years.

Debt Coverage: ZTS's debt is well covered by operating cash flow (27.8%).

Interest Coverage: ZTS's interest payments on its debt are well covered by EBIT (10.9x coverage).


Balance Sheet

Inventory Level: ZTS has a high level of physical assets or inventory.

Debt Coverage by Assets: ZTS's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Zoetis's current dividend yield, its reliability and sustainability?

0.57%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Years0.6%

Current dividend yield vs market & industry

Notable Dividend: ZTS's dividend (0.58%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ZTS's dividend (0.58%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: ZTS is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: ZTS is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: ZTS is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ZTS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Zoetis's salary, the management and board of directors tenure and is there insider trading?

7.3yrs

Average management tenure


CEO

Kristin Peck (48yo)

0yrs

Tenure

US$3,038,924

Compensation

Ms. Kristin C. Peck serves as Chief Executive Officer of Zoetis Inc. since January 1, 2020 and serves as its Director since October 3, 2019. Ms. Peck served as Group President of U.S. Operations, Business  ...


CEO Compensation Analysis

Compensation vs Market: Kristin's total compensation ($USD3.04M) is below average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Kristin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.3yrs

Average Tenure

53yo

Average Age

Experienced Management: ZTS's management team is seasoned and experienced (7.3 years average tenure).


Board Age and Tenure

6.6yrs

Average Tenure

67.5yo

Average Age

Experienced Board: ZTS's board of directors are considered experienced (6.6 years average tenure).


Insider Trading

Insider Buying: ZTS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,528,41225 Nov 19
Andrew Fenton
EntityIndividual
Role
Chief Technology Officer
Executive VP and Chief Digital & Technology Officer
Shares12,705
Max PriceUS$120.30
SellUS$210,10217 Jun 19
Willie Reed
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,900
Max PriceUS$110.58
SellUS$512,30007 Jun 19
Roman Trawicki
EntityIndividual
Shares4,700
Max PriceUS$109.00
SellUS$260,57504 Jun 19
Heidi Chen
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares2,500
Max PriceUS$104.23
SellUS$1,500,14813 Mar 19
Heidi Chen
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares15,710
Max PriceUS$95.49

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Bill Price

    VP & Chief Communications Officer

    • Kristin Peck (48yo)

      CEO & Director

      • Compensation: US$3.04m
    • Juan Alaix (68yo)

      Advisor & Director

      • Tenure: 7.5yrs
      • Compensation: US$11.67m
    • Andrew Fenton (55yo)

      Executive VP and Chief Digital & Technology Officer

      • Cathy Knupp (58yo)

        Executive VP and President of Research & Development

        • Tenure: 7.3yrs
        • Compensation: US$2.92m
      • Heidi Chen (52yo)

        Executive VP

        • Tenure: 7.3yrs
      • Clinton Lewis (52yo)

        Employee Advisor

        • Tenure: 7.3yrs
        • Compensation: US$4.63m
      • Roxanne Lagano (54yo)

        Executive VP and Chief Human Resources Officer & Global Operations

        • Glenn David (47yo)

          Executive VP & CFO

          • Tenure: 3.4yrs
          • Compensation: US$3.04m
        • Steven Frank

          Vice President of Investor Relations


          Board Members

          • Louise Parent (69yo)

            Independent Director

            • Tenure: 6.4yrs
            • Compensation: US$300.00k
          • Mike McCallister (67yo)

            Non-Executive Chairman

            • Tenure: 6.6yrs
            • Compensation: US$475.00k
          • William Steere (82yo)

            Independent Director

            • Tenure: 7yrs
            • Compensation: US$300.00k
          • Frank D'Amelio (61yo)

            Independent Director

            • Tenure: 7.5yrs
            • Compensation: US$300.00k
          • Sanjay Khosla (68yo)

            Independent Director

            • Tenure: 6.6yrs
            • Compensation: US$300.00k
          • Bob Scully (69yo)

            Independent Director

            • Tenure: 6.6yrs
            • Compensation: US$325.00k
          • Greg Norden (61yo)

            Independent Director

            • Tenure: 7yrs
            • Compensation: US$325.00k
          • Kristin Peck (48yo)

            CEO & Director

            • Compensation: US$3.04m
          • Juan Alaix (68yo)

            Advisor & Director

            • Tenure: 7.5yrs
            • Compensation: US$11.67m
          • Willie Reed (64yo)

            Independent Director

            • Tenure: 5.8yrs
            • Compensation: US$300.00k

          Company Information

          Zoetis Inc.'s company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Zoetis Inc.
          • Ticker: ZTS
          • Exchange: NYSE
          • Founded: 1952
          • Industry: Pharmaceuticals
          • Sector: Pharmaceuticals & Biotech
          • Market Cap: US$66.758b
          • Shares outstanding: 476.30m
          • Website: https://www.zoetis.com

          Number of Employees


          Location

          • Zoetis Inc.
          • 10 Sylvan Way
          • Parsippany
          • New Jersey
          • 7054
          • United States

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          ZTSNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 2013
          ZOEDB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2013
          0M3QLSE (London Stock Exchange)YesCommon StockGBUSDFeb 2013
          ZTS *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNFeb 2013
          ZOEETLX (Eurotlx)YesCommon StockITEURFeb 2013
          ZOTSWBAG (Wiener Boerse AG)YesCommon StockATEURFeb 2013

          Biography

          Zoetis Inc. discovers, develops, manufactures, and commercializes animal health medicines, vaccines, and diagnostic products in the United States and internationally. It commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep; and companion animals comprising dogs, cats, and horses. The company offers vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal, and reproductive tracts or induce a specific immune response; anti-infectives that prevent, kill, or slow the growth of bacteria, fungi, or protozoa; and parasiticides that prevent or eliminate external and internal parasites that include fleas, ticks, and worms. It also provides medicated feed additives that offer medicines to livestock; and other pharmaceutical products, which comprise allergy and dermatology, pain and sedation, antiemetic, reproductive, and oncology products. In addition, the company offers portable blood and urine analysis systems, and point-of-care diagnostic products, including instruments and reagents, rapid immunoassay tests, reference laboratory kits, and blood glucose monitors; and other non-pharmaceutical products, including nutritionals and agribusiness services, as well as products and services in complementary areas, such as biodevices and genetics. It markets its products to veterinarians, livestock producers, and retail outlets, as well as third-party veterinary distributors through its sales representatives, and technical and veterinary operations specialists. The company was founded in 1952 and is headquartered in Parsippany, New Jersey. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/21 00:49
          End of Day Share Price2020/01/17 00:00
          Earnings2019/09/30
          Annual Earnings2018/12/31


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.