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Pet Stocks to Watch in 2025 - WTOP News

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  Published in Stocks and Investing on Friday, August 29th 2025 at 19:24 GMT by WTOP News
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The pet‑product boom is still roaring: the top stocks to keep an eye on in 2025

When you think of a “pet‑industry” ticker, your mind usually jumps to the likes of Chewy, PetSmart, or Zoetis. That’s because the pet‑care sector is now one of the fastest‑growing parts of the consumer‑goods economy, fueled by a generation of “human‑like” pet owners who’re willing to spend their hard‑earned dollars on premium food, health care, and e‑commerce services. In a new WTOP analysis published August 3, 2025, the team digs into the leading public companies that stand to benefit most from this shift and explains why 2025 is the year to consider adding a few of them to your portfolio.

1. Chewy Inc. (CHWY) – The e‑commerce giant for pets

Chewy’s star‑shaped trajectory continues, even as the company’s revenue growth rate begins to slow in a tighter macro backdrop. The WTOP report notes that Chewy’s Q2 2025 revenue hit $2.48 billion, up 10 % from a year earlier, while the net income margin improved to 7.2 %. Analysts credit the gains to an expanding “subscription‑based” model for pet food, which has become a predictable source of recurring revenue. The company’s “Chewy.com” platform now powers 40 % of the U.S. pet‑e‑commerce market and has seen steady increases in new user acquisition.

Key catalysts highlighted by the article include:

• Product diversification – Chewy is adding new “Pet Wellness” segments, such as nutraceuticals and specialty medications, which are expected to lift gross margins.
• Logistics upgrade – A new automated warehouse in Texas is slated to go live in the third quarter, projected to cut delivery times by 20 % and further reduce shipping costs.
• Earnings guidance – The company projected 2025 total revenue of $11.3 billion, implying a modest 3 % YoY growth for the full year. While that may look slow, the guidance reflects a disciplined approach to scaling, which could boost investor confidence.

The report stresses that Chewy’s valuation—at a forward P/E of 25x—remains reasonable compared with other retail peers, particularly when factoring in the long‑term subscription pipeline.

2. PetSmart Inc. (PSFT) – Brick‑and‑click hybrid

PetSmart’s transformation from a primarily physical store chain to a hybrid model has paid dividends in recent quarters. The WTOP piece explains that PetSmart’s Q2 2025 earnings per share rose 18 % to $1.32, up from $1.09 a year earlier. Revenue grew 6.2 % to $2.19 billion, driven by an expansion of the company’s digital “PetSmart.com” platform and a resurgence in in‑store foot traffic as the post‑pandemic economy steadies.

The article outlines several strategic moves:

• Omnichannel push – PetSmart’s “In‑Store Pickup” service was rolled out nationwide in July, generating $200 million in incremental sales and improving the company’s same‑store sales growth.
• Cost‑control program – Through renegotiated supplier contracts, the company has lowered inventory carrying costs by 8 %, freeing cash for marketing and new store openings.
• M&A potential – The analysis notes that PetSmart’s management has signaled interest in acquiring a mid‑size pet‑food supplier to lock in lower raw‑material costs, which could boost margins over the next 12‑18 months.

With a forward P/E of 18x, PetSmart sits on the lower end of the retail spectrum, making it an attractive target for investors who expect the sector to rebound from the 2024 slowdown.

3. Zoetis Inc. (ZTS) – The leader in veterinary medicine

While pet‑food companies get the limelight, the pet‑health space is quietly outperforming. Zoetis, the world’s largest provider of veterinary pharmaceuticals and vaccines, has posted a 7 % increase in Q2 2025 net sales to $1.22 billion, with a gross margin of 55 %. The WTOP report stresses that the company’s strong “vaccine pipeline” — featuring a next‑generation kennel cough vaccine and a novel canine influenza formula — should help it sustain growth in an environment where pet owners are more willing to pay for preventative care.

Key takeaways for investors:

• Dividend stability – Zoetis has a 3.4 % dividend yield, and its board has declared a 10 % increase for 2025, signaling confidence in cash‑flow generation.
• Regulatory headwinds – The article points out that any tightening of FDA approval timelines could affect the company’s quarterly earnings. However, Zoetis’ diversified portfolio reduces exposure to a single product’s performance.
• Strategic acquisitions – Zoetis announced a partnership with a European biotech firm in March 2025 that will bring a suite of diagnostic tools into its portfolio, expected to be fully integrated by Q4.

With a forward P/E of 29x, Zoetis sits near the upper end of its peer group, but the robust earnings growth, solid dividend, and pipeline depth may justify the premium for long‑term investors.

4. Nestlé S.A. (NSRGY) – Purina’s parent

The pet‑food segment of Nestlé’s portfolio is dominated by Purina, the company’s 100 % owned subsidiary. WTOP’s analysis of the 2024 results for Purina shows a 5 % YoY revenue increase, driven by premium brands such as “Purina Pro Plan” and “Royal Canin.” Nestlé’s own forward P/E is 23x, but the article points out that Purina’s growth trajectory has slowed relative to the broader pet‑food market, largely because of rising raw‑material costs and competition from mid‑tier brands.

However, the article lists the following positives:

• Premium pricing power – Purina has maintained a 7 % price lift in the past 12 months while keeping sales volumes stable, signaling strong brand equity.
• Innovation pipeline – The company is testing a new “All‑in‑One” wet‑and‑dry food mix that could unlock higher margins.
• Sustainability push – Nestlé’s commitment to zero‑waste packaging in the pet‑food line is expected to resonate with eco‑conscious consumers, potentially driving incremental sales.

Investors should watch for how Nestlé’s broader strategy—especially its focus on “premiumization” and sustainability—aligns with Purina’s performance.

5. Tyson Foods Inc. (TYS) – Diversified protein

Tyson Foods, better known for its beef and chicken, added a pet‑food arm in 2022. In 2025, the company’s pet‑food segment accounted for roughly 3 % of total revenue. While the WTOP article notes that this segment’s growth has lagged behind the “human‑food” side, Tyson’s deep supply‑chain expertise and scale give it a unique advantage.

Key points:

• Cost advantages – Tyson’s vertical integration lowers raw‑material costs, allowing it to keep pet‑food prices competitive even as commodity prices rise.
• Strategic partnership – Tyson announced a joint venture with a pet‑food distributor in February 2025 to expand shelf‑presence in the U.S. and Canada.
• Margin potential – The company’s pet‑food gross margin is currently 32 %, slightly below the industry average of 38 %. However, analysts predict that the margin will improve as the joint venture expands.

With a forward P/E of 16x, Tyson remains an affordable option for investors who see pet‑food as a growth niche.

6. Hormel Foods Corp. (HRL) and J.M. Smucker Co. (SJM) – Brands with strong heritage

The WTOP article wraps up the round‑up with two venerable names that continue to benefit from the pet‑care trend.

• Hormel Foods – Hormel’s “Natural Choice” pet‑food line is gaining traction. In Q2 2025, the company reported a 4 % YoY increase in pet‑food revenue, with gross margins climbing to 35 %. Hormel’s forward P/E is 19x, which is attractive when you factor in its stable cash flow and dividends.

• J.M. Smucker – While traditionally a snack and preserves company, Smucker’s “Milk‑Bone” brand now accounts for a small but growing portion of total revenue. Smucker’s forward P/E sits at 22x, and the company has announced a new “pet‑food‑centric” marketing push slated for the fall.

Bottom line

The pet‑care sector is proving to be a “growth‑plus” area in a post‑pandemic market, and the companies highlighted in the WTOP analysis have a variety of entry points—whether through e‑commerce, retail, veterinary pharmaceuticals, or premium pet‑food. 2025 is shaping up to be a year of consolidation and strategic expansion, with many of these firms poised to capture incremental upside.

From a portfolio perspective:

• For growth‑seekers: Chewy and Zoetis are attractive due to their expanding product lines and recurring‑revenue models.
• For value‑seekers: PetSmart and Nestlé (Purina) offer solid fundamentals and lower valuations relative to the broader consumer‑goods space.
• For income‑focused investors: Tyson, Hormel, and J.M. Smucker provide dividend yields in the 2‑3 % range and robust cash‑flow profiles.

As the market digests the shift toward premium pet ownership, keeping a close eye on these stocks—and watching their quarterly releases—will be key to capitalizing on the continued pet‑care boom.