The 9 Best 'Purebred' Pet Stocks to Buy

Several blue chips play in the growing pet-care space, but these are the best pet stocks to buy if you want pure exposure to this blossoming opportunity.

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America's love affair with its pets is creating a booming pet care industry – and, as a result, a small but expanding cluster of pet stocks.

Pet care might be bigger than you realize. Edge by Ascential, a market research firm, says that North American spending on pets hit $225 billion in 2018, and is expected to hit $281 billion by 2023 – roughly 5% compound annual growth. Millennials and Gen-Zers are embracing pet ownership in far greater numbers than previous generations; roughly two-thirds of U.S. households own a pet, up from 56% just 30 years ago.

Rising demand is fueling a diverse set of pet stocks – companies that provide everything from premium kibble to medications to even pet DNA testing and health insurance.

You can get some pet-related exposure among blue chips such as General Mills (GIS (opens in new tab)), which acquired all-natural pet-food leader Blue Buffalo for $8 billion in 2018. Aon (AON (opens in new tab)) boasts a top-rated pet insurance business in the form of subsidiary Healthy Paws; Synchrony Financial (SYF (opens in new tab)) bought a principal rival, Pet's Best, in 2019. However, pet care remains a small portion of their overall business.

Here, we look at nine of the best pure-play pet stocks to buy right now. This is a mix of high-growth newcomers and a few more established plays. We'll start with a couple of well-known blue chips before making our way to some under-the-radar names.

Data is as of Feb. 5. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

Lisa Springer
Contributing Writer, Kiplinger.com

Lisa currently serves as an equity research analyst for Singular Research covering small-cap healthcare, medical device and broadcast media stocks.