Elanco Animal Health Incorporated (ELAN) vs Zoetis Inc. (ZTS)

Elanco Animal Health Incorporated and Zoetis Inc. are both Drug Manufacturers Specialty & Generic companies. Zoetis Inc. is the larger, with a market value of $29.2B against $11.2B — 2.6× the size. Elanco Animal Health Incorporated has negative trailing earnings, so its P/E is not meaningful; Zoetis Inc. trades at 11.7×. Elanco Animal Health Incorporated grew revenue faster over the last twelve months: 12.0% against 1.58%. Zoetis Inc. has the higher net margin (27.7% vs −3.96%) and the higher return on invested capital (19.6% vs 0.51%). Across the 21 metrics below, Zoetis Inc. leads on 15 and Elanco Animal Health Incorporated on 6.

Valuation

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
P/E n/m 11.69 20.14
P/S 2.22 3.12 2.25
P/B 1.69 9.43 1.90
Price to free cash flow 31.22 12.75 16.54
EV/EBITDA 18.78 9.55 12.29
EV/Sales 2.89 4.03 2.56
Earnings yield (1.84%) 8.56% (2.99%)
Free cash flow yield 3.20% 7.84% 0.00%

Profitability

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Gross margin 55.36% 71.67% 53.94%
Operating margin 1.61% 37.13% 0.00%
Net margin (3.96%) 27.69% 0.00%
Free cash flow margin 7.55% 24.43% 0.00%
Return on equity (2.98%) 64.91% (0.40%)
Return on assets (1.46%) 17.84% (3.32%)
Return on invested capital 0.51% 19.60% 0.00%

Growth

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Revenue growth (TTM) 11.95% 1.58% 10.01%
EPS growth (last fiscal year) (169.12%) 10.05% —
Revenue growth, 5-year CAGR 7.59% 7.24% 6.74%
Net income growth, 5-year CAGR 0.00% 10.29% 0.00%

Health

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Debt to equity 0.59 2.87 0.05
Current ratio 2.05 3.08 2.31
Net debt to EBITDA 5.00 1.65 0.85

Dividend

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Dividend yield — 0.76% 1.70%
Payout ratio 0.00 0.29 0.00

Size

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Market cap 11.21b 29.19b 337.35m

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