15 Dividend Stocks With Low Payout Ratios and Strong Upside

6. Zoetis Inc. (NYSE:ZTS)

Number of Hedge Fund Holders: 72

5-Year Average Payout Ratio: 28.17%

Upside Potential as of December 24: 31.7%

Zoetis Inc. (NYSE:ZTS) is among the best dividend stocks to invest in.

On December 18, Morgan Stanley lowered its price target on Zoetis Inc. (NYSE:ZTS) to $160 from $175 and kept an Overweight rating. In its year-ahead outlook, the firm said healthcare technology and providers offer an “attractive backdrop for alpha-generation opportunities” in 2026. Managed care is a different story. Those stocks lagged in 2025 and now face “another year of unprecedented policy, reimbursement, and utilization headwinds,” according to the analyst.

Earlier in the month, on December 5, Zoetis Inc. (NYSE:ZTS) shared a meaningful regulatory update. Health Canada approved Portela™ (relfovetmab injection) for the relief of osteoarthritis pain in cats. The treatment is designed to provide three months of pain relief with a single injection. It works by targeting anti-nerve growth factor, or NGF, a key driver of pain and inflammation in osteoarthritis.

Clinical data helped support the approval. In a nine-month field study conducted in Europe, Portela reduced OA pain and was well tolerated. That included cats with early-stage kidney disease, classified as IRIS stage 1, 2, or 3. Portela is already approved in the European Union, and Zoetis expects to launch the product commercially in both Canada and the EU in 2026.

Zoetis Inc. (NYSE:ZTS) operates as the world’s largest animal health company. Its work centers on advancing care for animals, with the broader goal of supporting animal well-being across companion and livestock markets.