A pandemic-induced puppy boom for lonely North Americans stuck at home continues to pay off postlockdown. General Mills’ dog and cat food business is just the latest industry player to announce a jump in sales – 14 per cent in the most recent quarter. The gain is partly the result of higher prices but also significantly greater volumes.
In fact, the American Pet Products Association reports that total pet industry sales in the U.S. hit US$136.8-billion in 2022, up a solid 10.8 per cent from 2021. This includes pet food and treats, veterinary care and products, supplies, live animals, over-the-counter medications and other services. And sales are forecast to rise a further 5 per cent this year, to US$143.6-billion.
At the same time, rising global living standards continue to boost demand for protein-rich meat diets. That in turn has helped the livestock business and expanded its health care needs. From a list of animal-health stocks we identified leaders that pay dividends. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:two points if it has raised the payment in the past five years;one point for operating in non-cyclical industries;two points for a strong balance sheet, including manageable debt and adequate cash;and one point if the company is an industry leader.
Companies with 10 to 12 points have the most secure dividends or the highest sustainability. Those with seven to nine points have above-average sustainability; four to six points, average sustainability; and one to three points, below-average sustainability.