ZTS - the more I dig, the more I go back and forth on it. Curious what this sub thinks.

Been looking at Zoetis for the past week and I keep landing in different places depending on which part of the analysis I'm staring at.

The moat case is real. Animal health doesn't work like human pharma vets don't price shop the way pharmacists do, in vet pharma, generic substitution just doesn't work the way it does in human healthcare - vets prescribe what they trust, pet owners don't ask for the cheaper version, and that pricing power holds, and the 71.84% gross margins reflect that. If you're thinking about it as a compounder you hold for a decade, the competitive position is genuinely durable.

Then I look at the balance sheet and my conviction drops. D/E at 2.86x is doing a lot of the work on that 67.75% ROE. Strip out the leverage and the return profile looks a lot less impressive. I keep asking whether I'm buying a great business or a leveraged version of a decent one, and I'm not sure I can answer that cleanly.

The other thing I can't shake: revenue growth at 2.9% YoY. The concentrated position thesis needs to believe that pricing power accelerates from here and volume picks up.

What's your read - moat strong enough to hold through the leverage, or does the balance sheet structure disqualify it from a high-quality portfolio?