Rising spending on pet food and care products with increased pet adoption amid the COVID-19 pandemic is driving the pet industry’s growth. So, we believe Zoetis (ZTS) and Chewy (NYSE:CHWY) are likely to benefit from the industry tailwinds. But let’s find out which of these stocks is a better buy now. Read on. Zoetis Inc . (NYSE:ZTS) and Chewy, Inc. (CHWY) are two prominent players in the pet care industry. ZTS develops, manufactures, and markets veterinary vaccines and medicines, complemented by diagnostic products and genetic tests and supported by various services. In contrast, CHWY operates an online platform to sell pet food, medications, and other pet-related products.
A significant increase in pet adoption amid the pandemic, as people spent much more time at home, has led to greatly increased spending on pet food and medications. As the spending on pets grows, companies in this space are accelerating their research and development to benefit from the rising demand for drugs, vaccines, diagnostic devices, and pet-friendly products and services. As a result, the global pet care market is expected to grow at 5.2% CAGR to $255.40 billion by 2027. Investor optimism toward this sector is evident in the ProShares Pet Care ETF’s (PAWZ) 7.9% gains over the past three months, compared to the SPDR S&P 500 Trust ETF’s (SPY) 4.6% returns. Thus, both ZTS and CHWY should benefit from the industry tailwinds.
While CHWY's stock price has lost 8% year-to-date, ZTS’ has surged 20.9%. In terms of their past six months’ performance, ZTS is a clear winner with 22.5% gains versus CHWY’s negative returns. But, which of these stocks is a better pick now? Let’s find out.