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 $32.4B against $11.8B — 2.8× the size. Elanco Animal Health Incorporated has negative trailing earnings, so its P/E is not meaningful; Zoetis Inc. trades at 13.0×. 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 13.03 19.25
P/S 2.34 3.47 2.11
P/B 1.79 10.51 1.78
Price to free cash flow 32.95 14.21 16.14
EV/EBITDA 19.58 10.40 12.58
EV/Sales 3.02 4.39 2.73
Earnings yield (1.74%) 7.68% (4.38%)
Free cash flow yield 3.03% 7.04% 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% 49.06%
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 0.97

Dividend

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Dividend yield — 2.64% 1.57%
Payout ratio — 0.34 0.27

Size

Metric ELAN ZTS Drug Manufacturers Specialty & Generic median
Market cap 11.76b 32.40b 276.90m

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