Zoetis

Methodology

Zoetis' fair value calculation works well given the company's consistent earnings growth driven by companion animal medicines and livestock vaccines with strong recurring revenue characteristics. The method captures Zoetis' position as the leading animal health company with predictable demand from pet ownership trends and protein production needs. Fair value estimates are reliable because the business model emphasizes recurring prescriptions for pet parasiticides and chronic disease treatments, creating annuity-like revenue streams.

Methodology

Zoetis typically commands premium PEG ratios reflecting its dominant position in animal health with strong competitive moats, pricing power, and secular growth from pet humanization and global protein demand. The PEG framework works well for Zoetis because growth rates are steady and supported by companion animal spending and livestock production expansion, particularly in emerging markets. Comparing Zoetis' PEG to other specialty pharma and consumer health companies provides context for relative valuation in the defensive animal health niche.

Methodology

Zoetis pays a modest dividend, as management balances returning cash to shareholders with reinvesting in R&D, lifecycle management, and geographic expansion to maintain leadership in animal health. PEGY adds incremental value by incorporating the dividend alongside consistent growth expectations. For total-return investors, PEGY captures both Zoetis' reliable growth in companion animal and livestock health plus its commitment to steady dividend growth over time.