Animals are a huge part of our lives. From a pet standpoint, the pet industry is huge in the United States. In 2015, Americans spent an estimated $60 billion on their pets. It shouldn’t surprise anyone that this number is only going to rise in the coming years. From a livestock perspective, the industry is estimated to be a $1.4 trillion dollar machine per year and continue to grow.
This is where Zoetis (NYSE: ZTS) comes into play. They are a medical company for livestock and animal companions.
What does this company do and why should you invest in it if you love animals? Here are the details about this animal loving stock.
Who Is Zoetis?
As mentioned, Zoetis deals with the medicine of livestock and companion animals. They operate both in the United States and internationally. This includes 70 countries in total and they recently expanded into Southeast Asia, including China.
The company was officially spun off from Pfizer in 2013 and at that time, was earning $4.9 billion in revenue.
The company focuses on 5 major areas related to animal medicine:
- Medicated Feed Additives
The company has been working on developing new medicines for animals and has won FDA approval for Cytopoint, which is a canine eczema treatment.
Zoetis By The Numbers
Zoetis recently reported first quarter numbers and they beat estimates on both earnings per share and revenue growth. Earnings per share came in at $0.53 which is an increase of 10% compared to last year. Revenue growth rose 6%.
When you dig deeper into the numbers you will see another positive sign. The company does business both in the U.S. and internationally. In both cases, the company is seeing solid growth. This is key as one isn’t carrying the other. They are both performing well and adding to the bottom line.
Furthermore, the company has new medicines it has been developing coming to market and seeking FDA approval. Should these medicines win approval, they will add nicely to the bottom line as well.
The company also confirmed it expects to hit revenue estimates for full year 2017 of between $5.1 and $5.2 billion. Earnings per share for the year is expected to come in between $2.26 and $2.36 per share.
Surprisingly, many analysts have higher expectations for the company.
Should You Buy Zoetis?
In a simple word, yes. As I mentioned at the beginning of this post, more and more Americans have and love their pets. Some will spare no expense at keeping Fluffy or Duke healthy and well. This bodes well for Zoetis.
And then there is the livestock. As we add more people to this planet, disease and hunger are major concerns. By taking care of our livestock, both in the U.S. and internationally, we all benefit.
As a major player in both of these areas, Zoetis is primed and ready to take advantage of the growth and money in this space. And the stock should perform well as a result.
Even though Zoetis is trading near an all-time high, the stock is still a good buy for investors. People love their pets and will spend the money, either through preventive measures or on an as needed basis. Zoetis has both of these covered.
When it comes to livestock, the company is there as well along the entire spectrum offering services and medicines to keep livestock healthy and return any sick animals back to health.
The bottom line for Zoetis is strong and I don’t see any reason why this company and the stock won’t continue to produce.
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.