Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 6 Oct 2026
ZTS· Healthcare
Zoetis
Zoetis Inc.'s 21.8% ROIC and 37.6% operating margin reflect a durable competitive advantage in animal health.
Buffett fit
Partial fit
Owner
79
Durability
84
Management
65
Price
81
Score updated 29 Oct 2026 · analysis from 6 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning Zoetis would mean benefiting from its strong of 21.8% and a share count reduction of 1.67% annually.
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Zoetis has demonstrated consistent profitability, with net income positive over the last five years and a 5-year EPS CAGR of 8.88%.
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Zoetis's is disciplined, with a yield of 5.3% and a share count reduction of 1.67% annually.
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With a of 11.9 and an EV/ of 10.8, Zoetis appears reasonably valued.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 21.8% is top-quintile in the healthcare sector.
- 2 of 37.6% is well above the sector's top-quintile cutoff.
- 3Net margin of 27.8% indicates strong profitability.
- 4Interest coverage of 14.8 shows excellent debt management.
Concerns
6- 1 of 70.8% is below the sector's top-quintile cutoff.
- 2Market cap decrease of 7.41% versus retained earnings suggests value leakage.
- 3 growth is slightly negative at -0.65% YoY.
- 4Dividend CAGR of 1.17% is relatively low.
Price history
$78.80-63.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Zoetis Inc. develops and sells animal health products, including medicines, vaccines, and diagnostic tools. The company operates in both livestock and companion animal markets, generating $9.47B in revenue with a 27.8% net margin. Its business model benefits from streams as products are essential for animal health. Overall, Zoetis exhibits strong unit economics with a 21.8% .
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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