North Americans love to spend on their beloved pets. According to the American Pets Products Association, owners spent $50.96 billion on their pets in 2011, up from $48.35 billion in 2010. It is currently projected that pet owners spent around $52.87 billion in 2012. Let's take a look at some of the biggest names associated with the pet industry.
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Pet SuppliesThe largest, publicly traded pet supply retail is PetSmart (Nasdaq:PETM) with around 1,150 stores and an additional 750 animal hospitals. Interestingly enough, PETM has been seeing sales growth and steady margins. The stock has been strong, currently a few dollars of its 52 week high. Fundamentally, PETM is also attractive with a forward P/E ratio of 16.6 and a current price-to-sales ratio of only 1.03. PETM is up 14.5% so far for 2012.
Animal HealthSpending on doggie toys has not been slowing, so it comes as no surprise that the money going to maintain pets' health is following the trend. Therefore, investors who are interested in investing in the growth in spending on pets can also choose to look at companies that run the animal hospitals or supply the medicine administered by the veterinarians. (For related reading, see The Economics Of Pet Ownership.)
MWI Veterinary Supply (Nasdaq:MWIV) is a distributor of animal health products to veterinarians and animal hospitals. The company was able to flourish during the recession, and revenues increased by 27% in 2011 over 2010 numbers. MWIV is up 25.3% year to date.
While MWIV supplies its products to doctors, PetMed Express (Nasdaq:PETS) markets its prescription and non-prescription pet medications directly to the consumer via . PETS has been on an upward trend throughout this year. PETS is up 15.7% on the year.
Hospitals and Testing
VCA Antech (Nasdaq:WOOF) operates in three divisions: animal hospitals, laboratories and medical technology. The company is trading at an attractive 13.5 forward P/E ratio. WOOF is up 12.9% on the year.
VCA Antech (Nasdaq:WOOF) operates in three divisions: animal hospitals, laboratories and medical technology. The company is trading at an attractive 13.5 forward P/E ratio. WOOF is up 12.9% on the year.
Neogen (Nasdaq:NEOG) is an interesting play because it is involved in food and animal safety products. The animal safety division focuses on drugs, vaccines, medical equipment and diagnostic tests that can be sold directly or through large farm supply retail chains. NEOG is up 20% year to date.
The Bottom LineAnimal-related stocks should hold up better than the overall market in the event of a new bear market.
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