June 17, 2025 a 07:46 am
ZTS: Dividend Analysis - Zoetis Inc.
Zoetis Inc., a leader in animal health, showcases a strong commitment to delivering shareholder value through consistent dividends. With a market cap of $73.18 billion and a dividend history spanning over 13 years, the company has displayed resilience and growth in its dividend policy.
📊 Overview
Zoetis Inc.'s dividend profile is characterized by a respectable yield and significant history of payouts. The absence of any recent dividend cuts further underscores management's dedication to sustaining shareholder returns.
| Metric | Value |
|---|---|
| Sector | Animal Health |
| Dividend Yield | 1.18% |
| Current Dividend per Share | $1.73 |
| Dividend History | 13 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Zoetis's steady dividend payments over the years highlight its robust financial health and disciplined capital management. The historical trend in dividend payouts serves as a testament to the company's commitment to rewarding its shareholders.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.50 |
| 2024 | 1.73 |
| 2023 | 1.50 |
| 2022 | 1.30 |
| 2021 | 1.00 |
📈 Dividend Growth
The ability to maintain and grow dividends is crucial for evaluating the sustainability of future payments. Zoetis's dividend growth signals the company's strong earnings and cash flow generation capabilities.
| Time | Growth |
|---|---|
| 3 years | 20% |
| 5 years | 21.37% |
The average dividend growth is 21.37% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios are pivotal in assessing dividend sustainability, indicating the portion of earnings and cash flows being returned to shareholders.
| Key figure | Ratio |
|---|---|
| EPS-based | 30.76% |
| Free Cash Flow-based | 33.78% |
The payout ratios suggest that Zoetis maintains a prudent approach, with considerable capacity to uphold its dividend amidst variable earnings and cash flow conditions.
🏢 Cashflow & Capital Efficiency
Effective capital allocation and cash flow stability determine a company's potential to sustain dividends and invest in growth opportunities.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.11% | 1.78% | 1.93% |
| Earnings Yield | 3.36% | 2.58% | 3.08% |
| CAPEX to Operating Cash Flow | 22.15% | 31.11% | 30.65% |
| Stock-based Comp. to Revenue | 0.80% | 0.70% | 0.77% |
| Free Cash Flow / Operating Cash Flow Ratio | 77.82% | 68.89% | 69.35% |
Zoetis demonstrates above-average cash flow metrics, supporting dividend payments and investments in growth initiatives.
📊 Balance Sheet & Leverage Analysis
A solid balance sheet and manageable leverage levels are essential for financial flexibility and minimizing risk.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.41 | 1.35 | 1.84 |
| Debt-to-Assets | 47.37% | 47.28% | 54.20% |
| Debt-to-Capital | 58.57% | 57.48% | 64.75% |
| Net Debt to EBITDA | 1.23 | 1.28 | 1.34 |
| Current Ratio | 1.75 | 3.36 | 2.37 |
| Quick Ratio | 1.07 | 2.00 | 1.63 |
| Financial Leverage | 2.98 | 2.86 | 3.39 |
The consistent reduction in leverage ratios favors financial stability, further enhancing investor confidence and dividend security.
✅ Fundamental Strength & Profitability
High profitability and efficient operations reflect Zoetis's capacity to generate steady earnings, crucial for dividends and reinvestment.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 52.12% | 46.91% | 47.99% |
| Return on Assets | 17.46% | 16.41% | 14.16% |
| Net Margin | 26.86% | 27.43% | 26.16% |
| EBIT Margin | 36.28% | 37.38% | 35.61% |
| EBITDA Margin | 41.83% | 43.13% | 41.56% |
| Gross Margin | 70.62% | 68.28% | 69.63% |
| Research & Development to Revenue | 7.41% | 7.19% | 6.67% |
The strong return metrics coupled with robust margins signify operational excellence and potential for continued prosperity.
📉 Price Development
📋 Dividend Scoring System
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 2 | |
| Dividend Stability | 4 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 32/40
🗳️ Rating
Zoetis Inc. exemplifies a well-rounded investment opportunity, offering stability and growth. With a high dividend continuity score and strong financial health, it is recommended as a viable long-term dividend investment. Investors should consider Zoetis as part of a balanced portfolio strategy aimed at stable income and moderate capital appreciation.