Analyzing Zoetis (NYSE:ZTS) and Sandoz Group (OTCMKTS:SDZNY)

Zoetis (NYSE:ZTS) and Sandoz Group (OTCMKTS:SDZNY) are both large-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Earnings & Valuation

This table compares Zoetis and Sandoz Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zoetis	$9.26 billion	6.84	$2.49 billion	$5.81	24.60
Sandoz Group	$10.36 billion	2.52	$1.00 million	N/A	N/A

Zoetis has higher earnings, but lower revenue than Sandoz Group.

Volatility and Risk

Zoetis has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Sandoz Group has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Profitability

This table compares Zoetis and Sandoz Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zoetis	27.83%	56.90%	19.54%
Sandoz Group	N/A	N/A	N/A

Dividends

Zoetis pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. Sandoz Group pays an annual dividend of $0.44 per share and has a dividend yield of 0.7%. Zoetis pays out 34.4% of its earnings in the form of a dividend. Zoetis has raised its dividend for 14 consecutive years. Zoetis is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Zoetis and Sandoz Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zoetis	0	5	5	0	2.50
Sandoz Group	0	3	0	0	2.00

Zoetis currently has a consensus target price of $200.88, indicating a potential upside of 40.56%. Given Zoetis’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Zoetis is more favorable than Sandoz Group.

Insider and Institutional Ownership

92.8% of Zoetis shares are held by institutional investors. Comparatively, 0.1% of Sandoz Group shares are held by institutional investors. 0.2% of Zoetis shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Zoetis beats Sandoz Group on 13 of the 15 factors compared between the two stocks.

About Zoetis

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. It also offers parasiticides, vaccines, dermatology, other pharmaceutical, anti-infectives, animal health diagnostics, and medicated feed additives. In addition, the company provides animal health diagnostics, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, which include nutritionals, as well as products and services in biodevices, genetic tests, and precision animal health. It markets its products to veterinarians, livestock producers, and pet owners. The company has collaboration Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was founded in 1952 and is headquartered in Parsippany, New Jersey.

About Sandoz Group

Sandoz Group AG develops, manufactures, and markets generic pharmaceuticals and biosimilars worldwide. The company covers therapeutic areas, including cardiovascular, central nervous system, oncology, infectious diseases, pain and respiratory, diabetes, immunology, endocrinology, hematology, and ophthalmology, as well as bone disease. It also provides a portfolio of active pharmaceutical ingredients and finished dosage forms. The company was founded in 1886 and is headquartered in Basel, Switzerland.