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Zoetis

ZTS
61
Drug Manufacturers - General · Healthcare
Price
$76.56
-0.35 (-0.46%)
Market Cap
$32.10B
Winston Score
61
Winston is curious
A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−6.9% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 476.7M (2021) → 443.8M (2025)

Zoetis makes medicines and vaccines for animals. Its products treat pets like dogs and cats, as well as farm animals like cattle, pigs, and chickens. The company was spun out of Pfizer in 2013 and is now the largest standalone animal health company in the world.

Zoetis sells its products directly to veterinarians, livestock producers, and farm operators, earning revenue through product sales rather than subscriptions. It operates in over 100 countries, with the United States and Europe making up the majority of revenue. Its moat comes from a large portfolio of patented drugs, deep relationships with vets, and the high cost of getting new animal medicines approved — all of which make it hard for competitors to take market share. The main growth driver is the rising number of pet owners willing to spend more on their animals' health, though a key risk is patent expirations on top products like Apoquel and Cytopoint, which could invite generic competition.

Winston Score History

Politician Trades

46 trades / 12mo

28 Congressional buys and 18 sells on ZTS in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+3.0% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+7.0% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$698M/ year

→ Flat (+2% vs prior year)

7.4% of revenue

Below sector average (18%)

Steady R&D investment year-over-year

Insider Activity

0.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$2.3B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Zoetis is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Gross Margin
68.9%
Premium pricing power — 68.9% gross margin
Operating Margin
34.6%
Excellent — 34.6% operating margin
ROCE
6.5%
Weak — 6.5% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+2.3%
Nearly flat sales (2.3% YoY)
EPS YoY
+10.0%
Earnings growing (10.0% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency
8/8 quarters
Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion
109%
Turns 109% of profit into real cash
FCF Margin
24.1%
Converts sales into free cash efficiently (24.1%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
2.79
Heavy debt load (2.79)
Interest Cover
15.11x
Comfortably covers interest (15.1x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
12.7x
Attractive valuation — P/E 12.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+3.2
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (12.7 → 9.5)

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Dividends

Dividend Yield
2.71%
Moderate income — 2.71% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+8.2%
Dividend growing modestly (8.2% YoY)

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