Pet Portfolio: 9 Stocks For Animal Lovers

NEW YORK ( TheStreet) -- It's said that a dog is a man's best friend, but he could also be your best investment.

Pet stocks -- those companies that cater to the health and happiness of your furry companion -- is arguably the hottest growth market going.

Indeed, amid the greatest consumer downturn of this generation, the pet industry managed to grow 5.4% in 2009 to $45.5 billion, according to the American Pet Products Association (APPA).

"Pet suppliers offer more compelling growth prospects than most retail categories," Morningstar analyst R.J. Hottovy, wrote in a note. And it doesn't seem like this momentum will slow any time soon, with APPA predicting another 5% jump in 2010.

According to the APPA, 63% of U.S. households own pets, and it's a number that's poised to expand, as the trend of humanizing pets has also boosted the sector. Service-based businesses like dog walkers, pooper-scoopers, trainers and even massage-therapists are booming, while day care, pet walking and pet sitting all continue to be in high demand.

Within the sector, the more reliable pet plays are those companies that provide veterinary and animal-health products; while consumers might delay purchasing a new chew-bone for their pup, or might stock up on a cheaper brands of biscuits, they won't deny medical care to their beloved pet.

In 2009 health-care spending on pets surged 8.5%, as medical advances generated a greater range of services available. "From CAT scans, root canals and cancer surgery, to antibiotics, anti-depressants and even grief counseling, pet owners have more medical choices and spending options than ever before," the APPA said. The association expects this sector to increase 6% in 2010.

Still, with such a litter of pet-centric companies to choose from -- and still others with smaller animal divisions -- how can the investor sort through them all? Read on....

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