As more Americans become pet owners, a promising trend has begun to emerge. Here’s what you need to know about the rising pet market and how to capitalize on its potentially high growth potential.
What are pet stocks?
Pet stocks belong to companies that manufacture the goods and technologies that support the pet industry. Major players in this category include Chewy, Freshpet, IDEXX Laboratories and Zoetis.
What subcategories does it include?
A variety of subcategories comprise the pet industry, including:
Pet food manufacturers
Pet insurance providers
Pet supply retailers
Veterinary diagnostics
Veterinary pharmaceuticals
Veterinary services
How to invest in the pet sector
Interested in backing the pet market? Here’s how to add pet market stocks to your portfolio:
Pick an investment platform. Explore your account options by comparing research tools, platform features and applicable trading fees.
Open an account. Fill out an account application and link an external bank account to fund your portfolio.
Select your securities. Pinpoint stocks you’re interested in by searching for company name or ticker symbol.
Submit your order. Complete your order by indicating how many shares you’d like to purchase and selecting the type of order you’d like to execute.
Monitor your investments. Track the performance of your investments from your brokerage account.
What stocks are in the pet sector?
As competition heats up in this emerging market, we’re likely to see more companies going public. But there are also plenty of established pet stocks to consider:
See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.
Company summary
Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.
Covetrus, Inc., together with its subsidiaries, operates as an animal-health technology and services company. It engages in the sale of animal-health consumable products, including proprietary and Covetrus branded products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, parasiticides, and vitamins and supplements to wholesale and retail customers. The company also offers value-added solutions, such as inventory management and e-commerce, as well as continuing education services for practitioners. In addition, it provides practice management software, data-driven applications, client communications tools, and related services to increase staff efficiency and enhance business health; and solutions that integrate with its software platforms, including client communication services, reminders, data backup services, hardware sales and support, and credit card processing services for veterinary practitioners and animal-health clinics. Further, the company engages in the distribution of finished goods pharmacy and specialty pharmaceutical compounding products, as well as offers shipping, manufacturer incentives, service fees, and data integration and support services. It serves animal-health and veterinary practices, and clinics in the companion-animal, equine, and large-animal markets primarily in North America, Europe, and the Asia Pacific. The company was formerly known as HS Spinco, Inc. Covetrus, Inc. was incorporated in 2018 and is headquartered in Portland, Maine. As of October 13, 2022, Covetrus, Inc. was taken private.
Elanco Animal Health Incorporated, an animal health company, innovates, develops, manufactures, and markets products for pets and farm animals. It offers pet health disease prevention products, such as parasiticide and vaccine products that protect pets from worms, fleas, and ticks under the Seresto, Advantage, Advantix, and Advocate brands; pet health therapeutics for pain, osteoarthritis, ear infections, cardiovascular, and dermatology indications in canines and felines under the Galliprant and Claro brands; vaccines, antibiotics, parasiticides, and other products for use in poultry and aquaculture production, as well as nutritional health products, including enzymes, probiotics, and prebiotics; and a range of vaccines, antibiotics, implants, parasiticides, and other products used in ruminant and swine production under the Rumensin and Baytril brands. The company sells its products to third-party distributors; veterinarians; and farm animal producers, including beef and dairy farmers, as well as pork, poultry, and aquaculture operations. Elanco Animal Health Incorporated was founded in 1954 and is headquartered in Greenfield, Indiana.
Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.
IDEXX Laboratories, Inc. develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets in Africa, the Asia Pacific, Canada, Europe, Latin America, and internationally. The company operates through three segments: Companion Animal Group; Water Quality Products; and Livestock, Poultry and Dairy. It also provides point-of-care veterinary diagnostic products, including instruments, consumables, and rapid assay test kits; veterinary reference laboratory diagnostic and consulting services; practice management and diagnostic imaging systems and services for veterinarians; and health monitoring, biological materials testing, and laboratory diagnostic instruments, and services for biomedical research community. In addition, the company offers diagnostic and health-monitoring products for livestock, poultry, and dairy; products that test water for various microbiological contaminants; point-of-care electrolytes and blood gas analyzers; in-clinic chemistry, blood and urine chemistry, hematology, immunoassay, urinalysis, and coagulation analyzers; and SNAP rapid assays test kits. Further, it provides Colilert, Colilert-18, and Colisure tests, which detect the presence of total coliforms and E. coli in water; Enterolert, Pseudalert, Filta-Max and Filta-Max xpress, Legiolert, and Quanti-Tray products; and veterinary software and services for independent veterinary clinics and corporate groups. Additionally, the company offers human medical point-of-care products and laboratory diagnostics services. The company markets its products through marketing, customer service, sales, and technical service groups, as well as through independent distributors and other resellers. IDEXX Laboratories, Inc. was incorporated in 1983 and is headquartered in Westbrook, Maine.
PetMed Express, Inc., together with its subsidiaries, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses. It offers non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and household pet supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, and other pet supplies. It sells its products through its Internet website; mobile app; customer support center; and direct mail/print, which includes brochures and postcards. The company was incorporated in 1996 and is headquartered in Delray Beach, Florida.
Trupanion, Inc., together with its subsidiaries, provides medical insurance for cats and dogs on a monthly subscription basis in the United States, Canada, Continental Europe, and Australia. The company operates in two segments, Subscription Business and Other Business. It serves pet owners and veterinarians. The company was formerly known as Vetinsurance International, Inc. changed its name to Trupanion, Inc. in 2013. Trupanion, Inc. was founded in 2000 and is headquartered in Seattle, Washington.
Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. It also offers parasiticides, vaccines, dermatology, other pharmaceutical, anti-infectives, animal health diagnostics, and medicated feed additives. In addition, the company provides animal health diagnostics, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services, and blood glucose monitors; and other non-pharmaceutical products, which include nutritionals, as well as products and services in biodevices, genetic tests, and precision animal health. It markets its products to veterinarians, livestock producers, and pet owners. The company has collaboration Blacksmith Medicines, Inc. to discover and develop novel antibiotics for animal health. Zoetis Inc. was founded in 1952 and is headquartered in Parsippany, New Jersey.
If you’re seeking a pet-focused ETF, look into the ProShares Pet Care ETF (PAWZ). This ETF tracks 27 stocks across the pet sector, including Chewy, Trupanion and Zoetis. Stocks are spread across a variety of veterinary pharmaceutical companies, pet supply retailers, pet food manufacturers and more. Outside the ProShares Pet Care ETF, there aren’t many funds that focus exclusively on pet stocks — although this may change given the rising volume of interest in the industry.
Why invest in the pet sector
As first-time pet parents joined the already growing ranks of US pet ownership in 2020, we saw a lift in an already noteworthy trend: increased spending on pets. According to a 2019 to 2020 pet ownership survey conducted by the American Pet Products Association, 67% of US households own a pet. And this level of widespread pet ownership translates to hefty pet care spending. In fact, when it comes to e-commerce sales, pet care is the second-largest consumer packaged goods market in the US, according to Statista. From 2016 to 2018 alone, US households purchasing pet products swelled by over 5 million. That’s a heck of a lot of squeaky toys. In 2019, the US pet care market was worth $95.8 billion, reports Global Market Insights. And that market is expected to experience a 5.9% compound annual growth rate (CAGR) from 2020 to 2026 — a trend fueled by pandemic-induced pet acquisition. Numerous news outlets, including CNBC, The Washington Post and USA Today, delivered 2020 reports of the collective emptying of local animal shelters as Americans opened their homes in droves to the kinship of new furry, four-legged family members. The bottom line? The pet care industry is on the rise.
What unique risks does the pet sector face?
Any sector poised for rapid growth will be rife with competition. And the pet industry is no exception. The way we shop and care for our pets is changing. With the migration to e-commerce that took place during the pandemic, businesses found themselves facing a sink or swim dilemma — and many didn’t survive. The question is: how will the transition affect the way we provide for our pets in the coming years? It may be too early to say, but one thing remains clear: pet ownership is on the rise and high growth potential means steep competition. Smaller and more affordable companies to invest in may not make it. Well-established stocks may become too pricey to purchase. All investments carry risk, but those that belong to a rapid growth industry like the pet market can be especially volatile.
Bottom line
The pet sector is thriving but isn’t without its risks. Namely: this industry is in a transitory growth period and high competition can trigger volatility. To invest, you’ll need a brokerage account. Review your platform options with multiple providers to find the account that best meets your needs.
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Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga. See full bio
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