Returns surge for pet-related stocks

These stocks are no dogs.

With Americans spending like never before on their animal companions, stock watchers have been betting on big returns from pet stocks.

The Pet Passion index, a tracker created by Motif Investing that follows pet-related companies, has returned 19 percent over the past year as of Thursday’s stock-market close, sprinting well ahead of the rest of the stockmarket pack. The S&P 500 Index has only marked an 8.5 percent gain so far this year.

Among the best in show is pet pharmacy PetMed Express Inc., which has seen its shares nearly double over the past year. Trupanion Inc., which offers pet health insurance, is up about 44 percent in that span, while IDEXX Laboratories Inc., a veterinary-diagnostics company, has gained about 30 percent.

An improving economy has encouraged pet adoptions and loosened up the wallets of people who already have one, analysts say. Another factor: Younger Americans are putting off having kids but are making room for a dog or a cat.

“Americans sometimes take care of their pets better than they take care of their own health,” said Mark Massaro, an analyst at Canaccord Genuity Inc. “Americans just love their pets.”

Pet-related spending in the U.S. is estimated to exceed $69 billion this year, up from about $60 billion in 2015 and nearly double its level in 2005, says the American Pets Products Association, an industry trade association. About 90 percent of the estimated 2017 spending is on food, supplies and pet health care.