Zoetis (NYSE:ZTS) versus Jazz Pharmaceuticals (NASDAQ:JAZZ) Critical Contrast

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

Insider & Institutional Ownership

89.1% of Jazz Pharmaceuticals shares are owned by institutional investors. Comparatively, 92.8% of Zoetis shares are owned by institutional investors. 4.1% of Jazz Pharmaceuticals shares are owned by insiders. Comparatively, 0.2% of Zoetis shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Jazz Pharmaceuticals and Zoetis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jazz Pharmaceuticals	20.45%	33.97%	13.02%
Zoetis	27.49%	74.89%	18.59%

Volatility and Risk

Jazz Pharmaceuticals has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Zoetis has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Jazz Pharmaceuticals and Zoetis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jazz Pharmaceuticals	0	1	17	1	3.00
Zoetis	2	9	8	0	2.32

Jazz Pharmaceuticals presently has a consensus price target of $289.37, suggesting a potential upside of 22.47%. Zoetis has a consensus price target of $101.08, suggesting a potential upside of 43.79%. Given Zoetis’ higher possible upside, analysts clearly believe Zoetis is more favorable than Jazz Pharmaceuticals.

Earnings & Valuation

This table compares Jazz Pharmaceuticals 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
Jazz Pharmaceuticals	$4.27 billion	3.59	-$356.15 million	$14.50	16.30
Zoetis	$9.47 billion	3.07	$2.67 billion	$6.07	11.58

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

Summary

Zoetis beats Jazz Pharmaceuticals on 8 of the 15 factors compared between the two stocks.

About Jazz Pharmaceuticals

Jazz Pharmaceuticals plc identifies, develops, and commercializes pharmaceutical products for unmet medical needs in the United States, Europe, and internationally. The company offers Xywav for cataplexy or excessive daytime sleepiness (EDS) with narcolepsy and idiopathic hypersomnia; Xyrem to treat cataplexy or EDS with narcolepsy; Epidiolex for seizures associated with Lennox-Gastaut and Dravet syndromes, or tuberous sclerosis complex; Zepzelca to treat metastatic small cell lung cancer, or with disease progression on or after platinum-based chemotherapy; Rylaze for acute lymphoblastic leukemia or lymphoblastic lymphoma; Enrylaze to treat acute lymphoblastic leukemia and lymphoblastic lymphoma; Defitelio to treat severe hepatic veno-occlusive disease; and Vyxeos for newly-diagnosed therapy-related acute myeloid leukemia. It also develops Zanidatamab to treat HER2-expressing gastroesophageal adenocarcinoma (GEA), and patients with HER2-expressing metastatic GEA; Zepzelca for the treatment of patients with select relapsed/refractory solid tumors based on limited response in three solid tumor cohorts; JZP815, a pan-RAF kinase inhibitor that targets components of the mitogen-activated protein kinase; JZP898, a conditionally-activated interferon alpha molecule; Epidiolex to treat LGS, DS, and TSC; Suvecaltamide to treat parkinson’s disease tremor; JZP150, a fatty acid amide hydrolase inhibitor program to treat post-traumatic stress disorder; and JZP441 to treat narcolepsy, IH, and other sleep disorders. The company has licensing and collaboration agreements with XL-protein GmbH to extend the plasma half-life of selected asparaginase product candidates; Redx Pharma plc for preclinical activities Ras/Raf/MAP kinase pathway program; and Autifony Therapeutics Limited on discovering and developing drug candidates targeting two different ion channel targets associated with neurological disorders. The company was incorporated in 2003 and is headquartered in Dublin, Ireland.

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.