Key Takeaways
- GSK yields 3.6% and Zoetis 2.7%, and each paid out about 40% of its free cash flow over its latest twelve months.
- Zoetis grew its dividend 19% a year from fiscal 2020 to fiscal 2025, while GSK’s fell 12% a year over the same years before growing again.
- GSK’s sales rose 5% in the third quarter of 2026, while Zoetis’s revenue fell 1% as new rivals and generics hit its pet medicines.
- The 10-year answer depends on whether Zoetis can keep raising faster than GSK while its sales shrink.
GSK (GSK) raised its third-quarter dividend to 17p a share, from 16p a year earlier, when it reported on Oct. 28, and it expects to pay 70p for 2026. A week later, Zoetis (ZTS) reported third-quarter revenue down 1%, as new rivals and generics ate into its pet medicines.
Generics are coming for GSK too, since dolutegravir loses exclusivity between 2028 and 2030. Yet GSK yields 3.6% to Zoetis’s 2.7%, while Zoetis has raised its dividend far faster. So which one pays you more over the next 10 years?
| Metric | GSK (GSK) | Zoetis (ZTS) |
|---|---|---|
| Dividend yield | 3.6% | 2.7% |
| Dividend growth, fiscal 2020-2025 | -12.0% a year | 19.0% a year |
| Cash dividend payout ratio (TTM) | 39% (to June 30, 2026) | 40% (to Sept. 30, 2026) |
| Net debt/EBITDA | 1.8x | 1.9x |
| Interest coverage | 14.7x | 14.9x |
Source: TIKR and StockAnalysis (GSK’s yield at its current dividend rate), at today’s prices.
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GSK’s check is growing again
GSK’s -12.0% growth rate comes from a reset. The cash it paid in dividends fell from £4.00 billion in fiscal 2021 to £2.25 billion in fiscal 2023, then rose 4.9% in fiscal 2025 to £2.56 billion. GSK sets its dividend in pence, so the dollars a US holder collects move with the pound.
Free cash flow has covered the dividend in every year of the last decade:
That left a well-covered payout of 40.1% in fiscal 2025.
The business behind the check is growing. Third-quarter sales rose 5% to £8.9 billion, led by specialty medicines, up 15% on launches in oncology and respiratory, while vaccines slipped 2% on Shingrix destocking in China. Management expects margins to hold steady or improve through the dolutegravir years, helped by savings from its Accelerate Growth cost program. One open item: a Delaware court is due to rule by early 2027 in Tesaro v. AnaptysBio, after an Oct. 20 hearing, and a loss for GSK would come out of the same cash.
Zoetis’s check is outgrowing its sales
Where GSK’s dividend is rebuilding, Zoetis’s climbed 19.0% a year from fiscal 2020 to fiscal 2025, and the cash it paid out rose 12.8% in fiscal 2025 alone. Free cash flow has kept up, rising from $500 million in fiscal 2016 to $2.28 billion in fiscal 2025:
The payout peaked at 46.1% in fiscal 2022 and was a well-covered 38.9% in fiscal 2025. Zoetis says that after reinvesting in the business, “excess capital is returned to shareholders as demonstrated by the $2.4 billion distributed in 2026 through the third quarter in the form of both buybacks and dividends.” With $886 million paid in dividends over the twelve months to Sept. 30, buybacks took most of that, which leaves cash it could steer toward raises.
The sales are the problem. Third-quarter US revenue fell 6% as its dermatology products lost share to new entrants and Convenia and Cerenia faced generics, while livestock grew 7%. Management now expects 2026 revenue of $9.22 billion to $9.32 billion, down 1% to 2% organically, though it raised its adjusted EPS outlook to $6.25 to $6.35. On Oct. 8, Zoetis declared a fourth-quarter dividend of $0.53 a share, the same as the second and third quarters. It raises once a year, so a flat quarter isn’t a freeze. Its next raise will show how it weighs a shrinking top line.
So which dividend wins?
Zoetis pays you more over 10 years. At their 5-year rates, $10,000 in Zoetis pays about $6,678 over the decade against about $2,141 from GSK, but GSK’s rate includes its reset. At each dividend’s pace now, 12.8% for Zoetis and 4.9% for GSK, Zoetis still pays about $4,920 to GSK’s $4,459. Its yearly income passes GSK’s around 2030, and by year 10 it’s about $797, close to 8% on the original $10,000.
GSK has a real case. It pays the bigger check today, $356 a year on $10,000 against $270, and it covers that check just as well, and its sales are growing while Zoetis’s shrink. If Zoetis’s raises slowed to near GSK’s pace, GSK would come out ahead. It’s just that Zoetis’s free cash flow has kept pace with a decade of fast raises, and a 40% payout leaves it room to keep going.
Of course, the gap is only about $461 over the decade, so Zoetis’s next annual raise matters. Its dermatology share loss slowed to 4 points from 7 in the third quarter, and the USDA licensed its longer-acting Cytopoint Plus on Nov. 11. That’s the business to watch.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
