Analyzing Zoetis (NYSE:ZTS) and Sanofi (NASDAQ:SNY)

Zoetis (NYSE:ZTS) and Sanofi (NASDAQ:SNY) are both large-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

Zoetis pays an annual dividend of $2.12 per share and has a dividend yield of 2.6%. Sanofi pays an annual dividend of $1.76 per share and has a dividend yield of 4.2%. Zoetis pays out 34.9% of its earnings in the form of a dividend. Sanofi pays out 92.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Zoetis has increased its dividend for 14 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Zoetis	27.49%	74.89%	18.59%
Sanofi	8.66%	14.19%	7.95%

Analyst Ratings

This is a breakdown of current ratings for Zoetis and Sanofi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zoetis	2	11	7	0	2.25
Sanofi	1	12	7	1	2.38

Zoetis currently has a consensus price target of $98.07, suggesting a potential upside of 19.73%. Sanofi has a consensus price target of $49.50, suggesting a potential upside of 17.97%. Given Zoetis’ higher probable upside, equities analysts clearly believe Zoetis is more favorable than Sanofi.

Insider & Institutional Ownership

92.8% of Zoetis shares are owned by institutional investors. Comparatively, 14.0% of Sanofi shares are owned by institutional investors. 0.2% of Zoetis shares are owned by company insiders. Comparatively, 1.0% of Sanofi shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Zoetis has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Sanofi has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.

Earnings & Valuation

This table compares Zoetis and Sanofi”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zoetis	$9.47 billion	3.58	$2.67 billion	$6.07	13.49
Sanofi	$49.35 billion	2.06	$8.84 billion	$1.91	21.97

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

Summary

Zoetis beats Sanofi on 10 of the 17 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 Sanofi

Sanofi, a healthcare company, engages in the research, development, manufacture, and marketing of therapeutic solutions in the United States, Europe, Canada, and internationally. It operates through Pharmaceuticals, Vaccines, and Consumer Healthcare segments. The company provides specialty care, such as DUPIXENT, neurology and immunology, rare diseases, oncology, and rare blood disorders; medicines for diabetes and cardiovascular diseases; and established prescription products. In addition, it offers poliomyelitis, pertussis, and hib pediatric vaccines; influenza, booster, meningitis, and travel and endemic vaccines, which includes hepatitis A, typhoid, cholera, yellow fever, and rabies vaccines. The company also provides cough, cold, and flu, allergy, and pain care products, as well as physical, mental, and digestive wellness products; and offers products for itching, hydration, aging, cracking, overnight, and specialty skincare needs like eczema. Further, it has a collaboration and license agreement with Exscientia to develop up to 15 novel small-molecule for oncology and immunology; ABL Bio, Inc. to develop ABL301, a treatment for alpha-synucleinopathies; Blackstone Life Sciences to develop pivotal studies and clinical development program; and Seagen Inc. to design, develop, and commercialize antibody-drug conjugates for cancer. Additionally, the company has a collaboration agreement with IGM Biosciences, Inc. to develop, manufacture, and commercialize IgM antibody; Skyhawk Therapeutics, Inc to discover and develop novel small molecules; and Adagene Inc., for the discovery and development of antibody-based therapies. It also has collaborations with Scribe Therapeutics Inc. to develop genome editing technologies; and co-promotion service agreement with Provention Bio, Inc. for the commercialization of teplizumab. The company was formerly known as Sanofi-Aventis and changed its name to Sanofi in May 2011. Sanofi was incorporated in 1994 and is headquartered in Paris, France.