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So I walked into my neighborhood pet store (part of a national chain) to buy some dog food, and stopped to look at the chew toys. I found a nice one that I thought my dog would like then looked at the price of the product and yelled out a loud swear word. Everyone in the store turned to look at me. I couldn't believe $24.95 for a toy that should have cost a dollar (in my opinion). I'm sure the store paid about a dollar for it and is making a nice markup.

When I checked out, I was handed a flyer about the ice cream social the store is having for dogs next weekend. They will be serving the dogs a choice of ice cream or frozen yogurt (for the dogs who are on a low fat diet, I assume).

This experience gave me a wake-up call about the pet industry. Even though I didn't buy that expensive toy for my dog (he's happy with tennis balls), I'm sure that there are many who do pay those prices.

Although I don't own any pet stocks right now, I am planning on adding one or two to my portfolio. I'm not recommending them to you; you need to do your own due diligence; I'm just giving you an idea of what I like. I've identified three that look interesting from the list of about ten pet-related stocks at WallStreetNewsNetwork.com, and they cover three sub-industries, pet food and toys, pet drugs, and pet hospitals.

Petsmart

Petsmart Inc. (NASDAQ:PETM) trades at 16.7 times trailing earnings and 14.5 times future earnings, plus it pays a 1.4% yield. The company sells toys, pet food, and other supplies at over 1,000 retail outlets. Earnings for the latest quarter increased by 1.3% year-over-year on a 1.1% revenue rise.

The company PetMed Express PetMed Express Inc. (NASDAQ:PETS) is one of the major online pet pharmacies. The stock has a trailing price to earnings ratio of 16, and a forward PE of 15. Earnings rose 4.6% for the latest quarter ending June 30. The stock has a very favorable yield of 5.1%.

WOOF

VCA Inc. (NASDAQ:WOOF) provides medical and surgical services in its animal hospitals, and offers laboratory services for animal hospitals and practices. The stock trades at 24 times trailing earnings and 18 times forward earnings. Earnings for the latest quarter increased by 9.4%, on a 5.2% boost in revenues.

Disclosure: Author didn't own any of the above at the time the article was written.

Source: 3 Pet-Related Stocks