Financial Review: Zoetis (ZTS) and Cara Therapeutics (CARA)

Zoetis (NYSE: ZTS) and Cara Therapeutics (NASDAQ:CARA) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Earnings and Valuation

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This table compares Zoetis and Cara Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zoetis $5.31 billion 7.37 $864.00 million $1.75 46.06
Cara Therapeutics $910,000.00 434.31 -$58.12 million ($1.91) -6.33

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

Insider & Institutional Ownership

92.3% of Zoetis shares are held by institutional investors. Comparatively, 52.8% of Cara Therapeutics shares are held by institutional investors. 0.3% of Zoetis shares are held by insiders. Comparatively, 7.5% of Cara Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Zoetis pays an annual dividend of $0.50 per share and has a dividend yield of 0.6%. Cara Therapeutics does not pay a dividend. Zoetis pays out 28.6% of its earnings in the form of a dividend. Zoetis has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Zoetis and Cara Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zoetis 0 5 12 0 2.71
Cara Therapeutics 0 2 11 0 2.85

Zoetis currently has a consensus price target of $79.53, suggesting a potential downside of 1.33%. Cara Therapeutics has a consensus price target of $25.46, suggesting a potential upside of 110.62%. Given Cara Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Cara Therapeutics is more favorable than Zoetis.

Volatility & Risk

Zoetis has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Cara Therapeutics has a beta of 2.92, meaning that its share price is 192% more volatile than the S&P 500.

Profitability

This table compares Zoetis and Cara Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zoetis 16.28% 65.96% 14.22%
Cara Therapeutics N/A -71.69% -63.47%

Summary

Zoetis beats Cara Therapeutics on 10 of the 16 factors compared between the two stocks.

About Zoetis

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.

About Cara Therapeutics

Cara Therapeutics, Inc. is a clinical-stage biopharmaceutical company. The Company is focused on developing and commercializing chemical entities designed to alleviate pain and pruritus by focusing on kappa opioid receptors. It is developing a class of product candidates that target the body’s peripheral nervous system. The Company operates through the activities related to the discovery and development of therapeutics to treat serious medical conditions, including pain and pruritus. Its product candidate pipeline includes I.V. CR845 for acute pain; I.V. CR845 for uremic pruritus; Oral CR845 for acute and chronic pain, and CR701 for neuropathic and inflammatory pain. I.V. CR845 is an injectable version of peripheral kappa opioid receptor agonist, which is intended for the treatment of acute pain in an acute care setting. CR845 has exhibited anti-pruritic, or anti-itch, potency in standard preclinical models.

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