Zoetis (ZTS): Harnessing Growth with Minimum Rivalry

Fundsmith, an investment management firm based in London, has released its annual 2025 investor letter for its “Fundsmith Equity Fund.” A copy of the letter can be downloaded here. The fund focuses on investing in equities globally. The T Class Accumulation shares where the firm invested returned 0.8% in 2025, compared to 12.8% for the MSCI World Index (‘Index’) in sterling with dividends reinvested. Since its inception, the fund has returned 1.7% p.a. more than the index. The fund attributed its underperformance during 2025 to index concentration, the growth of assets in Index Funds, and weakness in the dollar. In addition, please check the fund’s top five holdings to know its best picks in 2025.

 In its fourth-quarter 2025 investor letter, Fundsmith Equity Fund highlighted stocks such as Zoetis Inc. (NYSE:ZTS). Zoetis Inc. (NYSE: ZTS) is involved in the research, development, manufacturing, and sale of animal health medications, vaccines, and diagnostic products. On January 9, 2026, Zoetis Inc. (NYSE:ZTS) stock closed at $127.17 per share. One-month return of Zoetis Inc. (NYSE:ZTS) was 7.17%, and its shares lost 22.13% of their value over the last 52 weeks. Zoetis Inc. (NYSE:ZTS) has a market capitalization of $56.36 billion.

Fundsmith Equity Fund stated the following regarding Zoetis Inc. (NYSE:ZTS) in its fourth quarter 2025 investor letter:

“We sold our stakes in Brown-Forman and PepsiCo and started purchasing stakes in Zoetis Inc. (NYSE:ZTS), EssilorLuxottica, Intuit and Wolters Kluwer during the year. Zoetis is the leading veterinary pharmaceutical company. Apart from tapping into the long term growth in pet healthcare spend, it has the advantage that multi-billion dollar sales blockbuster drugs do not exist in veterinary care and so they attract less generic competition. Zoetis’s share price had a poor period caused by concerns over side effects associated with Librela, its drug for chronic pain from osteoarthritis (my lurcher has it). Our veterinary consultant tells me she still prescribes it as the benefits outweigh the potential side effects.”

Is Zoetis a Unique Dividend Play in the Pharma Space for 2025?

Zoetis Inc. (NYSE:ZTS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 72 hedge fund portfolios held Zoetis Inc. (NYSE:ZTS) at the end of the third quarter, compared to 75 in the previous quarter. Zoetis Inc. (NYSE:ZTS) reported revenue of $2.4 billion in the third quarter of 2025, growing 1% on a reported basis and 4% on an organic operational basis. While we acknowledge the risk and potential of Zoetis Inc. (NYSE:ZTS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Zoetis Inc. (NYSE:ZTS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Zoetis Inc. (NYSE:ZTS) and shared the list of some of the best dividend stocks. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.