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PetSmart, Inc. (PETM) Hasn’t Gone to the Dogs: Target Corporation (TGT), Wal-Mart Stores, Inc. (WMT)

Target Corporation (NYSE:TGT) does look tempting though. The retailer reported mixed Q4 results, a result of expansion efforts in Canada. But the company is optimistic for 2013. Target Corporation (NYSE:TGT) expects adjusted EPS of $4.85 to $5.05, ahead of analysts’ expectation of $4.40 for fiscal 2013. Deutsche Bank says the stock is undervalued and raised the stock to a buy after the March earnings report. Shares trade at modest P/E of 14.66 and yield a decent $2.17. The stock remains a favorite among mutual funds and other market institutions.

Wal-Mart Stores, Inc. (NYSE:WMT) also appears attractive. The company recently reported EPS that were up 10.6% from the same year ago period, and increased its dividend. Sales are growing both here and abroad. Of particular note was that the Bentonville, AK based company gained market share for food, consumables, health, wellness and over-the-counter items, as well as entertainment items and toys.

No denying these two mass retailers look like good bets, but investors who look at PetSmart, Inc. (NASDAQ:PETM) are not barking up the wrong tree.

With some 1,200 stores in the United States and Canada, PetSmart is the top dog in its industry. The company offers more than 10,000 products in stores and on its website. Stores have boarding facilities, provide grooming services and offer obedience training. Through pet hospital operator Medical Management International, which PetSmart owns 20%, veterinary services are available in roughly 800 shops.

Revenue for the pet industry is projected to remain strong through at least 2017, according to the APPA. Also expected to grow is the number of pet owing households, their wallets and their willingness to spend money on a pet. That is simply dog gone dandy, the cat’s meow, and good news for PetSmart, Inc. (NASDAQ:PETM).

The article PetSmart Hasn’t Gone to the Dogs originally appeared on and is written by Diane Alter.

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