ZTS - Zoetis: My Favorite Healthcare Stock Right Now

2024-03-21 15:11:54 ET

Summary

• Zoetis Inc. has shown unique compounding results since spinning off from Pfizer, with double-digit EPS and dividend growth CAGRs since inception.
• The loneliness epidemic is driving demand for companion animals, and Zoetis is well positioned to benefit from the rise in pet ownership and pet-related spending.
• Zoetis has a strong position in the animal health market, with increased pricing power and limited competition, making it a best-in-class asset in the industry.

In my last article , I mentioned my desire to reduce (and potentially, eliminate) my exposure to bio-pharma companies. So, the fact that I’m writing a bullish piece on Zoetis Inc. ( ZTS ) here might come as a surprise. But, in today’s report I’m going to discuss why I view Zoetis in a more positive light than other, better known, healthcare stocks such as Amgen ( AMGN ), Johnson and Johnson ( JNJ ), and Pfizer ( PFE ).

Simply put, since spinning off from Pfizer, Zoetis has produced very unique compounding results which have set the company apart from other human-centric bio-tech/bio-pharma companies.

Zoetis has posted positive annual EPS growth every year since its 2013 spin-off.

ZTS’s average annual EPS Growth rate since becoming a public company is 15.9%.

This has allowed the company to produce dividend growth CAGR of nearly 25% since 2013....

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