The COVID-19 pandemic has boosted the Animal Health industry, thanks to a bump-up in spending on pets. This is also because of the rise in pet ownership during this time. As the world went into lockdown with no social gatherings, pets became a source of companionship and distraction for individuals and families.
Per a report by American Veterinary Medical Association (AVMA), the percentage of pets in shelters being adopted increased to 58.36% in 2020 from 51.49% in 2019. Going by an article published by AVMA, annual sales of pet products and services in the United States are nearing $100 billion for the first time as 2019 spending reached $95.7 billion, according to a Feb 27 announcement from the American Pet Products Association.
Pet product marketers like Amazon, Walmart reported a considerable rise in online pet food sales in 2020 compared to 2019. Further, there has been a consequent rise in the use of medicine and diagnostic tests for pets, boosting revenues for animal-health companies.
Animal Health Industry Steals Spotlight
Just like the world around us, animal health is currently undergoing transformational change. Animals are receiving better care and medicines are becoming more targeted with the rise in pet adoption. The global animal health market size that was valued at $50.89 billion in 2020 is expected to reach $99.51 billion by 2028, at a CAGR of 8.8% (
Per a report by Grand View Research)
The rise in disease occurrence has encouraged companies to produce advanced vaccines and pharmaceuticals. The high demand has also resulted in a subsequent increase in the number of companies undertaking consistent efforts to control pathogen contamination risks and food-borne diseases. In addition, rising number of government initiatives to promote animal health products is driving the market.
Bet on Animal Health Stocks With Great Prospects PetIQ, Inc. ( PETQ Quick Quote PETQ - Free Report) is a pet medication and wellness company. The company reported record first-quarter 2021 results driven by continued strength and momentum across pet health and wellness business. During the last-quarter earnings update, the company noted that the performance in the fast-growing set of customers in the e-commerce channel was fueled by the Capstar brand along with PetArmor Plus. The company also noted the plan to launch an advanced product line which will position it better to compete within the e-commerce and direct-to-consumer channels for pet supplements. PetIQ expects to continue to benefit from rising pet adoption, increase in dollar spend per pet and emphasis on affordable convenient pet healthcare. Image Source: Zacks Investment Research
Currently, the stock carries a Zacks Rank #1 (Strong Buy). In 2021, the company is expected to report earnings growth of 135.8%. It has an estimated long-term earnings growth rate of 25%. Over the past six months, shares of the company have gained 9% compared with the industry’s rise of 2.6%. You can see
the complete list of Zacks #1 Rank stocks here. IDEXX Laboratories, Inc. ( IDXX Quick Quote IDXX - Free Report) is a developer, manufacturer and distributer of products and services, primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. The company derives the lion’s share of its revenues from the CAG segment. The company registered stellar first-quarter revenue growth within CAG. The company’s revenues grew 24.2% year over year driven by 26.5% growth in companion animal group (CAG) diagnostics revenues. Continued strength in clinical visits and related diagnostic products and services along with some benefits from lapping of prior-year COVID-19 impacts late in the reported quarter aided CAG Diagnostics’ segment recurring revenues. Image Source: Zacks Investment Research
Currently, the stock carries a Zacks Rank #2 (Buy). In 2021, the company is expected to report earnings growth of 18.9%. It has an estimated long-term earnings growth rate of 19.6%. Over the past six months, the stock has gained 24.9% compared with the industry’s growth of 2.7%.
Phibro Animal Health Corporation ( PAHC Quick Quote PAHC - Free Report) is the leading global diversified animal health and mineral nutrition company. Currently, the company is focused on expanding its footprint in the poultry, swine and cattle industries, in both domestic and international markets. Phibro is working actively to expand in the cattle markets in the United States, specifically in Mexico and Brazil, as well as in Canada, Australia and South Africa. Phibro is also looking to expand into the multi-billion dollar pet care industry to add another pillar to its business. The company is also evaluating opportunities in the oral space for cats and dogs, a space with an estimated addressable market of more than $2 billion. Image Source: Zacks Investment Research
Currently, the stock carries a Zacks Rank #2. In 2021, the company is expected to report earnings growth of 16.7%. It has a projected long-term earnings growth rate of 10.6%. Over the past six months, shares of the company have gained 49.4% compared with the industry’s growth of 2.6%.
Zoetis Inc. ( ZTS Quick Quote ZTS - Free Report) is a leader in the animal health space with a focus on both livestock and companion animal. During the last-quarter earnings update, the company confirmed the receipt of approvals for several leading products in China. On the livestock side, Fostera PCV MH, a one-shot vaccine for pigs that offers long-lasting combined protection against porcine circovirus type 2 (PCV2) and Mycoplasma hyopneumoniae infections, was approved along with ExcenRTU EZ (ceftiofur hydrochloride), a key anti-infective for cattle and swine. Image Source: Zacks Investment Research
Currently, the stock carries a Zacks Rank #2. In 2021, the stock is expected to report earnings growth of 16.6%. It has an estimated long-term earnings growth rate of 12.9%. Over the past six months, shares of the company have gained 14% against the industry’s fall of 16.6%.
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