4 Ways to Play Our Love for Man’s Best Friend: PetSmart, Inc. (PETM) and More

Page 2 of 2

Interestingly, most every retail sector has seen a shift from in-store shopping to the ease of online. The one exception? Pet-centric stores. Pet owners still fancy the intimate interaction for their pet as opposed to an unceremonious online purchase.

4. Pet meds niche
Animal health is a strong and growing market, and a recent entrant got my attention. In the biggest IPO since Facebook Inc (NASDAQ:FB)Pfizer Inc. (NYSE:PFE) spun off Zoetis Inc (NYSE:ZTS) a few weeks ago. With more than $4 billion in annual revenue, Zoetis is the largest stand-alone company completely devoted to pet medicines and vaccines. Pfizer divested Zoetis to focus on its core business, but still owns 80% of the company.

Pet owners are willing to fork over whatever the costs needed to ensure the health of their furry friends. And because pet parents often completely forgo pet insurance or just buy enough to take care of catastrophic misfortunes, almost all of the cost of pet meds comes directly out of pet owners’ pockets. As a result, Zoetis is uniquely positioned to benefit from the huge and growing animal health market.

Foolish bottom line
Of these four ways to play our love of pets, I like pet-centric PetSmart and Zoetis. PetSmart is poised to continue its success due to its dominant brand, licensing partnerships, strength of its services, and ample international growth prospects. I think Zoetis, while more of a niche market, offers an enticing way to play a growing industry. And I also like that the company was born out of Pfizer, the world’s largest drugmaker.

The article 4 Ways to Play Our Love for Man’s Best Friend originally appeared on Fool.com and is written by Nicole Seghetti.

Fool contributor Nicole Seghetti owns shares of Pfizer and Wal-Mart Stores. The Motley Fool recommends Amazon.com, Facebook, and PetSmart. The Motley Fool owns shares of Amazon.com and Facebook.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.



Page 2 of 2