Dr. Reddy's Laboratories Ltd (RDY) vs Zoetis Inc. (ZTS)

Dr. Reddy's Laboratories Ltd and Zoetis Inc. are both Drug Manufacturers Specialty & Generic companies. Zoetis Inc. is the larger, with a market value of $29.2B against $10.0B — 2.9× the size. Zoetis Inc. trades at the lower P/E: 11.7× against 30.8×. Zoetis Inc. grew revenue faster over the last twelve months: 1.58% against −11.6%. Zoetis Inc. has the higher net margin (27.7% vs 9.81%) and the higher return on invested capital (19.6% vs 5.89%). Both pay a dividend; Zoetis Inc. yields more (0.76% vs 0.66%). Across the 23 metrics below, Zoetis Inc. leads on 17 and Dr. Reddy's Laboratories Ltd on 6.

Valuation

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
P/E 30.85 11.69 20.14
P/S 2.79 3.12 2.25
P/B 2.35 9.43 1.90
Price to free cash flow 69.03 12.75 16.54
EV/EBITDA 15.92 9.55 12.29
EV/Sales 2.76 4.03 2.56
Earnings yield 3.24% 8.56% (2.99%)
Free cash flow yield 1.45% 7.84% 0.00%

Profitability

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
Gross margin 50.00% 71.67% 53.94%
Operating margin 10.91% 37.13% 0.00%
Net margin 9.81% 27.69% 0.00%
Free cash flow margin 4.05% 24.43% 0.00%
Return on equity 8.21% 64.91% (0.40%)
Return on assets 5.55% 17.84% (3.32%)
Return on invested capital 5.89% 19.60% 0.00%

Growth

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
Revenue growth (TTM) (11.60%) 1.58% 10.01%
EPS growth (last fiscal year) (30.38%) 10.05% —
Revenue growth, 5-year CAGR 6.66% 7.24% 6.74%
Net income growth, 5-year CAGR 14.08% 10.29% 0.00%

Health

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
Debt to equity 0.19 2.87 0.05
Current ratio 1.90 3.08 2.31
Net debt to EBITDA (0.15) 1.65 0.85

Dividend

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
Dividend yield 0.66% 0.76% 1.70%
Payout ratio 0.14 0.29 0.00

Size

Metric RDY ZTS Drug Manufacturers Specialty & Generic median
Market cap 10.02b 29.19b 337.35m

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