Sanofi (NASDAQ:SNY – Get Free Report) and Zoetis (NYSE:ZTS – Get Free Report) are both large-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Profitability
This table compares Sanofi and Zoetis’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sanofi | 8.66% | 14.19% | 7.95% |
| Zoetis | 27.49% | 74.89% | 18.59% |
Dividends
Sanofi pays an annual dividend of $1.76 per share and has a dividend yield of 4.3%. Zoetis pays an annual dividend of $2.12 per share and has a dividend yield of 2.7%. 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 pays out 34.9% of its earnings in the form of a dividend. Zoetis has increased its dividend for 14 consecutive years.
Valuation & Earnings
This table compares Sanofi and Zoetis”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sanofi | $48.92 billion | 2.01 | $8.84 billion | $1.91 | 21.26 |
| Zoetis | $9.53 billion | 3.44 | $2.67 billion | $6.07 | 13.07 |
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.
Insider & Institutional Ownership
14.0% of Sanofi shares are held by institutional investors. Comparatively, 92.8% of Zoetis shares are held by institutional investors. 1.0% of Sanofi shares are held by insiders. Comparatively, 0.2% of Zoetis shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Sanofi and Zoetis, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sanofi | 1 | 12 | 7 | 1 | 2.38 |
| Zoetis | 2 | 10 | 7 | 0 | 2.26 |
Sanofi currently has a consensus price target of $49.50, indicating a potential upside of 21.89%. Zoetis has a consensus price target of $99.14, indicating a potential upside of 25.01%. Given Zoetis’ higher probable upside, analysts clearly believe Zoetis is more favorable than Sanofi.
Volatility and Risk
Sanofi has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, Zoetis has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
Summary
Zoetis beats Sanofi on 10 of the 17 factors compared between the two stocks.
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.
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.
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