ZTS
📈 Zoetis demonstrates consistent financial growth, with operating profit increasing between 5-10% annually over the last three years and maintaining strong margins around 40%.
💰 The company boasts a 14-year track record of consecutive dividend increases, supported by a reasonable payout ratio of approximately 35%, although the current yield is modest at 1.2%.
⏳ While Zoetis holds a leadership position in an expanding market, its current valuation (P/E near 30) isn’t considered a bargain, suggesting potential investors might wait for a pullback towards the lower end of its recent trading range ($145-$190).
@rankia:
“Zoetis is a company that was born in 2013 from a Pfizer spinoff, with an exclusive focus on the veterinary sector, covering everything from medicines and vaccines to diagnostic tools for both production animals, meaning livestock, and pets. And of course, it hasn’t stopped benefiting from the huge increase in spending on pet care, especially in developed countries. Regarding its financial growth, it’s not a rocket, but it is constant. Its operating profit, or EBIT, has been growing at rates between 5% and 10% in the last 3 years, maintaining an EBIT margin close to 40%, which isn’t bad at all. This has translated into constant increases in its earnings per share, even reaching double-digit growth in some years. In fact, considering it’s a company that requires physical infrastructure—clinics, veterinary hospitals, etc.—these numbers are quite attractive. And if we talk about dividends, Zoetis has been increasing them for 14 consecutive years, with a current payout of approximately 35% and a dividend yield of 1.2%. It might not seem very high, but if the company maintains its path of growing profits, that dividend could rise at a good pace over the coming years. And now on the chart, the stock, as we see, has been moving in a more or less lateral range for just over 2 years. Specifically, it has been trapped in a wide channel between $145 and $190. Therefore, it might make sense to wait for a visit to the lower part of that range, near $145, to enter at a slightly more comfortable valuation. Well, today, with a P/E close to 30 times, it doesn’t seem like a bargain, but it’s not out of orbit either, considering its leadership position in a niche market in full expansion. For example, if there were a drop in its price due to any specific news, it could be a good opportunity to acquire Zoetis at an interesting price.”
Watch the exact part of the video where @rankia talks about Zoetis Inc. here:
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Read more articles by the world’s top 100 analysts on Zoetis Inc. (ZTS) at the following link. ZTS stock.
