Currently the most powerful animal in the game in its current stage is the Yeti and Sasquatch. They are large tough creatures that when aggravated will claw at the player, dealing large amounts of damage.
The Sasquatch will spawn in woodland areas, while the more difficult to kill and more powerful yeti, will spawn in the snow biomes. Sasquatch's will drop either Animal Fat, or Strong Pelt, which can be used to craft lots of useful items in the game, including guns. The Yeti will drop Animal Fat or Strong Pelt, which can be used for more useful items.
An effective way of killing the Yeti/Sasquatch is to have one player bait the creature while the other shoots it after initially gaining its attention by attacking from a distance.
It is recommended that you wait to take on a Yeti, as they can deal much more damage per hit than Sasquatchs. Both Sasquatches and Yetis appear to have the same amount of health.
An easy way to defeat them early game is to find a rock/platform that they cannot get up to and just use a Recurve Bow.