If it's true that dogs are a man's best friend, then it will come as no surprise that people are increasingly prepared to spend more on their beloved furry friends. It also stands to reason that this could be a growth industry worth investing in should the right opportunities be available.
In August 2017, Bloomberg published an article titled "pet stocks are beating the market". In this article, Bloomberg explained that, "the Pet Passion index, a tracker created by Motif Investing that follows pet-related companies, has returned 19% over the past year, sprinting well ahead of the rest of the stock-market pack. The S&P 500 Index has only marked an 8.5 % gain so far this year."
Whilst this article focuses on the US market and stocks such as PetMed Express Inc., Trupanion Inc.,and IDEXX Laboratories Inc., Australia is also following this trend. Yesterday, Quadrant Private Equity announced the sale of its investment in The Real Pet Food Co for $1 billion.
Investors looking for ASX-listed pet stocks might want to consider these two companies:
Foolish takeaway
Spending on pet services has been growing and the nature of the fragmented veterinary industry will present more consolidation opportunities for Greencross and NVL. Future success however, will likely be driven by their management teams' expertise in sourcing acquisitions with accretive earnings.