Financial Analysis: Zoetis (ZTS) and Its Peers

Zoetis (NYSE:ZTS) is one of 894 public companies in the “Pharmaceuticals” industry, but how does it compare to its rivals? We will compare Zoetis to similar businesses based on the strength of its analyst recommendations, earnings, valuation, institutional ownership, profitability, risk and dividends.

Earnings and Valuation

This table compares Zoetis and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Zoetis	$9.47 billion	$2.67 billion	14.12
Zoetis Competitors	$3.54 billion	$3.17 billion	553.75

Zoetis has higher revenue, but lower earnings than its rivals. Zoetis is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Zoetis pays an annual dividend of $2.12 per share and has a dividend yield of 2.6%. Zoetis pays out 36.1% of its earnings in the form of a dividend. As a group, “Pharmaceuticals” companies pay a dividend yield of 3.3% and pay out 48.0% of their earnings in the form of a dividend. Zoetis has raised its dividend for 14 consecutive years.

Profitability

This table compares Zoetis and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zoetis	26.15%	85.90%	18.39%
Zoetis Competitors	-2,393.19%	-220.45%	-16.12%

Institutional and Insider Ownership

92.8% of Zoetis shares are owned by institutional investors. Comparatively, 32.5% of shares of all “Pharmaceuticals” companies are owned by institutional investors. 0.2% of Zoetis shares are owned by insiders. Comparatively, 14.1% of shares of all “Pharmaceuticals” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Zoetis and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zoetis	1	12	8	0	2.33
Zoetis Competitors	7820	13783	25793	1036	2.41

Zoetis presently has a consensus price target of $101.25, indicating a potential upside of 21.91%. As a group, “Pharmaceuticals” companies have a potential upside of 24.82%. Given Zoetis’ rivals stronger consensus rating and higher possible upside, analysts clearly believe Zoetis has less favorable growth aspects than its rivals.

Risk and Volatility

Zoetis has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Zoetis’ rivals have a beta of -0.05, meaning that their average share price is 105% less volatile than the S&P 500.

Summary

Zoetis rivals beat Zoetis on 8 of the 15 factors compared.

About Zoetis

Zoetis is an animal health company that discovers, develops, manufactures and markets medicines, vaccines, diagnostic products and other services for animals. Its products support both companion animals, such as dogs and cats, and livestock, including cattle, pigs, poultry, sheep and fish. The company’s offerings include treatments for pain, infections and skin conditions, as well as vaccines, parasiticides, diagnostic tools and genetic testing services. Zoetis serves veterinarians, livestock producers and other animal health professionals around the world.