Investors would do well to remember part of the “Four legs good” chant from George Orwell’s “Animal Farm.”

Amid growth in the general health care sector this year, domestic and global trends are aligning to also boost animal health care stocks, both for the pet market and the livestock sector.

In the companion animal market, U.S. consumers will spend an estimated $60.6 billion on their pets this year, up from $58 billion last year, according to the American Pet Products Association trade group.

A healthy U.S. consumer environment is benefiting the pet sector, says Ryan Daniels, an equity analyst who covers animal health care stocks for Chicago-based financial services firm William Blair. Aging baby boomers and young couples alike are getting pets, adoptions are up, and so is spending on veterinary services, he says. Rising house sales and the greater availability of human health care under the Affordable Care Act has also helped the pet sector, he says.

Pet care stocks to buy. “There has been a secular trend in general around pets,” says Hardeep Walia, co-founder and CEO of online brokerage Motif Investing. Motif’s portfolios are based on themes, and its “Pet Passion” portfolio of 16 veterinary providers, pet supply makers and retailers is up 13.3 percent over the last year.

Large pure-play animal drugmaker Zoetis (ticker: ZTS) is up more than 16 percent over the last year. Other big animal veterinary drug manufacturers are housed within general human health care companies, such as Merck & Co. (MRK), Sanofi (SNY) and Eli Lilly and Co. (LLY).

Distributors of animal health care products include Henry Schein (HSIC), up 28 percent, and Patterson Companies (PDCO), up 11 percent. Diagnostic companies on the rise include IDEXX Laboratories (IDXX), up 13 percent, and VCA Inc. (WOOF), up 22 percent.

Smaller animal-focused health companies include Phibro Animal Health Corp. (PAHC), up 35 percent, and Heska Corp (HSKA), up 142 percent.

Relatively immune to recession. Another reason investors are flocking to animal health care stocks is that they are fairly resistant to economic downturns, because people are still going to feed and care for their pets in good times and bad, says Kevin Kedra, an equity analyst covering health care stocks with New York-based financial services firm Gabelli & Co. That’s true to a point, Walia says, but he notes that some people abandoned their pets during 2008 financial crisis.

Pet health care has also gone well beyond flea, tick and heartworm treatments, Kedra says. People have been raising the level of care they demand for their pets — everything from organic pet food to special shampoos to higher-priced drugs and special medical procedures.

“A lot more people are willing to pay to keep their pet heathy rather than put them down or take them to a shelter,” he says.

Animal health care stocks also tend to offer more stable growth than their human counterparts, Kedra says.

Companies catering to the human market are more reliant on blockbuster drugs with high price points, government reimbursement programs like Medicaid and Medicare and insurance companies. But the animal sector is generally a cash-pay business, and there is also less competition from generic drugs. It is also much easier to get drugs approved for animal use than for human consumption.

Over the next five years, both the companion and production animal drug segments are expected to grow as much as 6 percent, Kedra says.

Farm animal stocks are also doing well. A growing global population that is also becoming more affluent is driving demand for protein, which in turn is feeding demand for veterinary drugs and diagnostic equipment and services for farmed cows, chickens, pigs and fish. The United Nations and the Organization for Economic Co-operation and Development estimate global meat consumption will grow by 51 metric tons from this year to 2024.

Meat yields from cows are significantly less in China than in the U.S., and farmers in the Asian nation will use more drugs and diagnostic equipment and services to get that yield up, Daniels says.

Kedra adds that there is opportunity in the animal health care sector for mergers and acquisitions, as general pharmaceutical companies might want to enter the sector or expand their animal health holdings by buying companies for their stability and cash flow. He notes Eli Lilly’s $5.4 billion acquisition of the animal health business of Novartis (NVS).

Acquisitions generally command premiums, which are beneficial to investors holding the stock of the company that is acquired.

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Not Just for Cuddling: Pet Stocks Can Warm Your Wallet originally appeared on usnews.com