June 23, 2025 a 07:31 am
ZTS: Dividend Analysis - Zoetis Inc.
Zoetis Inc. presents an intriguing case with moderate dividend growth, a stable payout ratio, and strong returns on equity. The consistency in dividend payments through the years underlines financial stability, although the dividend yield remains modest. Investors should weigh the growth potential against the current yield and the robust financial metrics that Zoetis consistently shows.
📊 Overview
The following table provides a snapshot of Zoetis's key dividend data:
| Metric | Value |
|---|---|
| Sector | Healthcare |
| Dividend yield | 1.23% |
| Current dividend per share | 1.73 USD |
| Dividend history | 13 years |
| Last cut or suspension | None |
🗣️ Dividend History
Zoetis's dividend history is telling of a company that emphasizes consistency. With over a decade of uninterrupted dividends, this track record is vital for risk-averse investors focusing on income stability.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.5 |
| 2024 | 1.728 |
| 2023 | 1.5 |
| 2022 | 1.3 |
| 2021 | 1.0 |
📈 Dividend Growth
The growth of Zoetis's dividends showcases its commitment to rewarding shareholders, averaging substantial growth over both short-term and medium-term horizons.
| 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
The payout ratio is a good indicator of sustainability. Zoetis maintains a manageable payout ratio, ensuring dividends are funded through its earnings and free cash flow comfortably.
| Key figure | Ratio |
|---|---|
| EPS-based | 30.76% |
| Free cash flow-based | 33.78% |
The EPS payout ratio of 30.76% and FCF payout ratio of 33.78% reflect a healthy balance between paying dividends and retaining earnings for growth.
⚙️ Cashflow & Capital Efficiency
The cash flow and capital efficiency metrics are vital for assessing the company's operational health. They determine the company's ability to sustain its dividend policy over time.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.1% | 1.78% | 1.93% |
| Earnings Yield | 3.36% | 2.57% | 3.08% |
| CAPEX to Operating Cash Flow | 22.15% | 31.11% | 30.65% |
| Stock-based Compensation to Revenue | 0.80% | 0.70% | 0.77% |
| Free Cash Flow / Operating Cash Flow Ratio | 77.82% | 68.89% | 69.35% |
Zoetis demonstrates strong cash flow stability, allowing for continuous reinvestment and debt servicing.
⚖️ Balance Sheet & Leverage Analysis
An insight into Zoetis's balance sheet reveals a firm handling of leverage which maintains operating flexibility while mitigating financial risks.
| Metric | 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 | 1.08 | 2.00 | 1.62 |
| Financial Leverage | 2.98 | 2.86 | 3.39 |
Despite the moderate use of leverage, Zoetis holds a healthy balance sheet, supporting its creditworthiness and financial stability.
🌟 Fundamental Strength & Profitability
Fundamental strength indicates the company's ability to generate profitability from its operations, crucial for sustained earnings and dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 52.12% | 46.91% | 47.99% |
| Return on Assets | 17.46% | 16.41% | 14.16% |
| Margins: Net | 26.86% | 27.43% | 26.16% |
| Margin: EBIT | 36.28% | 37.38% | 35.60% |
| Margin: EBITDA | 41.83% | 43.13% | 41.56% |
| Margin: Gross | 70.62% | 68.28% | 69.63% |
| R&D to Revenue | 7.41% | 7.18% | 6.67% |
With substantial returns on equity and assets, Zoetis is efficiently converting its investments into profitable gains.
📉 Price Development
🔍 Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 35/40
⭐ Rating
Zoetis Inc. is a robust investment buy for dividend-focused portfolios, demonstrating a balance of moderate yield, solid growth, and financial strength. The company ranks impressively across dividend stability and financial ratios, confirming its sustainability and reliability as a dividend payer.