Brief profile $ZTS (-1,51 %)
- ISIN: US98978V1035
- Sector: Animal Health / Pharmaceuticals
- Market capitalization: approx. USD 75 billion
- Dividend yield: approx. 1.0
- Dividend growth: Ø 20 % p.a. in the last 5 years
- Main customers: Veterinarians, livestock farmers, animal owners worldwide
- Competitive advantage: global market leader in veterinary pharmaceuticals, high brand loyalty
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Why Zoetis? $ZTS (-1,51 %)
Zoetis is the world's largest provider of medicines and vaccines for animals. The company was spun off from Pfizer in 2013 - since then, profits have risen continuously.
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Megatrends behind us:
- Growing pet ownership worldwide (esp. USA, Asia)
- Increasing expenditure per animal (premium food, medicine, care)
- Rising global meat consumption → Animal health is important in agriculture
- Veterinary market is more robust than human medicine - less price pressure, stable demand
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Why is now a good time to start?
🔻 1.
Share has fallen significantly from its all-time high
- Since 2021 approx. -30% below all-time high (overvalued at 50+ P/E at the time)
- Valuation significantly more attractive again (forward P/E ratio 27-30, depending on estimate)
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Long-term growth intact
- Sales growth recently slowed (especially in China), but no structural problems
- New product pipeline in the areas of parasite protection, painkillers and vaccines
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Dividend with strong growth
- Dividend increased by ~20% p.a. in the last 5 years
- Very low payout ratio (~30%) → plenty of scope for further increases
- Buyback program continues → additionally shareholder-friendly
💊 4.
Strong business model
- Operating margin: ~35 %
- Gross margin: over 70
- High pricing power (branded products such as Apoquel, Simparica, Revolution)
📉 Risks
- Veterinary pharmaceuticals can be politically/ethically regulated in emerging markets
- Recent growth slightly below expectations (temporary?)
- Valuation level is not cheap, but justified for quality
✅ Conclusion:
Zoetis is a quality growth stock with a rising dividend - and attractively valued after the correction.
If you want to invest in a defensive growth stock with a long-term tailwind from the pet boom and animal health, Zoetis is a solid addition to your portfolio - both for dividend growth and for value-oriented investors with patience.
