Pets Are Loved. Pet Stocks Aren’t

In October 2024, the Harris Poll asked Americans about pets and kids: ‘If you had to choose, which would you prefer in the future?’

- STREET SMART BY JAMES K. GLASSMAN

Of the 2,125 respondents, 18% said children, 43% said pets, and the rest said both. Harris also found that a majority of Gen Z pet owners would give up a year of their own lives if it would add a year to their pet’s life.

In case you hadn’t noticed, Americans have gone ga ga over their pets. Some two-thirds of households own at least one, and, according to the Federal Reserve Bank of St. Louis, total spending on ‘pets, pet products and related services’ reached $188 billion in 2024 (the latest data), up from just $40 billion in 2000. Pet ownership has been building since about 1990, but it rose sharply during the COVID era, with pets providing stay-at-home singles and families with companionship; 78% of Americans bought a pet during the pandemic.

Savvy investors profited from the pet boom. In 2020, the worst COVID year, ProShares Pet Care (symbol PAWZ, $48), an exchange-traded fund, returned 61.4%, more than triple the rate of the S&P 500 index. Anything related to pets soared. A company that sells fashionable leashes and collars called Dogness (International)—yes, in parentheses—jumped from $21 on October 1, 2020, to $175 just 15 months later. Freshpet, which makes meals and treats that are ‘thoughtfully crafted for your best friend,’ roughly tripled from the beginning of April 2020 through the end of April 2021.

Then, as these things often do, the pet boom imploded. Within six months of its peak, Dogness had fallen 80%. It now trades slightly over one dollar per share with a market capitalization (shares outstanding times price) of just $15 million. Freshpet today is down more than two-thirds. (Stocks and funds I like are in bold; prices and other data are through May 31 unless otherwise noted.)

Straight from the source.