Phibro Animal Health Corporation (PAHC) & Zoetis (ZTS) Critical Comparison

Phibro Animal Health Corporation (NASDAQ: PAHC) and Zoetis (NYSE:ZTS) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitabiliy, dividends, institutional ownership and earnings.

Dividends

Phibro Animal Health Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Zoetis pays an annual dividend of $0.42 per share and has a dividend yield of 0.7%. Phibro Animal Health Corporation pays out 24.7% of its earnings in the form of a dividend. Zoetis pays out 24.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Zoetis has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Phibro Animal Health Corporation and Zoetis’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Phibro Animal Health Corporation	$758.62 million	2.01	$116.09 million	$1.62	23.70
Zoetis	$4.96 billion	6.16	$1.71 billion	$1.72	36.17

Zoetis has higher revenue and earnings than Phibro Animal Health Corporation. Phibro Animal Health Corporation is trading at a lower price-to-earnings ratio than Zoetis, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

47.2% of Phibro Animal Health Corporation shares are owned by institutional investors. Comparatively, 95.2% of Zoetis shares are owned by institutional investors. 48.1% of Phibro Animal Health Corporation shares are owned by company insiders. Comparatively, 0.3% of Zoetis shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Phibro Animal Health Corporation and Zoetis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Phibro Animal Health Corporation	8.49%	54.68%	10.12%
Zoetis	17.25%	65.35%	13.06%

Volatility & Risk

Phibro Animal Health Corporation has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Zoetis has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Phibro Animal Health Corporation and Zoetis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Phibro Animal Health Corporation	2	2	2	0	2.00
Zoetis	1	5	12	0	2.61

Phibro Animal Health Corporation presently has a consensus price target of $29.00, suggesting a potential downside of 24.48%. Zoetis has a consensus price target of $63.06, suggesting a potential upside of 1.36%. Given Zoetis’ stronger consensus rating and higher possible upside, analysts plainly believe Zoetis is more favorable than Phibro Animal Health Corporation.

Summary

Zoetis beats Phibro Animal Health Corporation on 14 of the 17 factors compared between the two stocks.

Phibro Animal Health Corporation Company Profile

Phibro Animal Health Corporation (Phibro) is a global diversified animal health and mineral nutrition company. The Company operates in three segments, which include Animal Health, Mineral Nutrition and Performance Products. The Company offers various products, which include Animal health products, such as antibacterials, anticoccidials, vaccines, nutritional specialty products and mineral nutrition products. The Company also manufactures and markets specific ingredients for use in the personal care, automotive, industrial chemical and chemical catalyst industries. The Company’s Medicated Feed Additives (MFAs) and other business consist of concentrated medicated products, which are administered through animal feeds. The Company’s MFAs and other business consists of the production and sale of antibacterials, including Stafac, Terramycin, Neo-Terramycin and Mecadox and anticoccidials, including Nicarb, Aviax, Aviax Plus, Coxistac and amprolium.

Zoetis Company Profile

Zoetis Inc. is engaged in the discovery, development, manufacture and commercialization of animal health medicines and vaccines, with a focus on both livestock and companion animals. The Company has a business, commercializing products across eight core species: cattle, swine, poultry, sheep and fish (collectively, livestock) and dogs, cats and horses (collectively, companion animals), and within five product categories: anti-infectives, vaccines, parasiticides, medicated feed additives and other pharmaceuticals. The Company’s segments include the United States and International. Within each of these operating segments, it offers a product portfolio for both livestock and companion animal customers. Its livestock products include Ceftiofur injectable line, Draxxin, Spectramast, Bovi-Shield line, Rispoval line, Suvaxyn/Fostera, Embrex devices and Lutalyse. Its companion animal products include Clavamox/Synulox, Convenia, ProHeart, Revolution/Stronghold, Apoquel, Cerenia and Rimadyl.