Zoetis Inc. ZTS

Zoetis looks like a durable compounder: branded/biologic IP, vet‑channel embeddedness, and global scale show up in elite margins and a ~22% ROIC, while the pipeline and omnichannel expansion provide a credible reinvestment runway (Key financial ratios (trailing 12 months); Strategic initiatives). Management’s capital allocation has been disciplined, combining steady R&D and capex with selective portfolio pruning and shareholder returns, backed by moderate leverage and strong interest coverage through cycles (Cash flow statements (annual); Balance sheet analysis). The main uncertainties are OA pain adoption, dermatology competition, and the IRS audit, but the business is diversified and cash‑generative. On valuation, a base‑case DCF with 7% FCFF growth for 10 years, 3.0% terminal growth, and 8.2% WACC implies about $142 per share, versus a current price near $143, with a bear/bull range of roughly $85–$200 reflecting OA and competitive outcomes (Valuation; Company profile). Overall, the setup suits long‑term investors focused on resilient moats, high returns on capital, and steady cash compounding rather than short‑term trading.