During the worst of the COVID-19 pandemic, the dental care market was hindered because people limited their visits to clinics and hospitals to avoid the virus. However, the industry is expected to grow robustly in the coming years with an increasing geriatric population suffering from dental disorders, the introduction of more efficient and advanced equipment for dental treatment, and government initiatives to boost public oral health care. According to the WHO 2020, oral diseases pose a significant health burden for many countries and affect people throughout their lifetimes.
The Global Dental Implants and Prosthesis Market is projected to grow at a 7.8% CAGR of 7.8% to reach $15.16 billion by 2026. High consumption of tobacco, alcohol, an unhealthy diet, and a high sugar intake are increasing dental disorders like periodontal disease, oral cancer, and other chronic conditions globally, thus creating a surge in demand for dental services.
Given the growth prospects of the industry, fundamentally sound dental stocks Henry Schein, Inc. (HSIC), Straumann Holding AG (SAUHY), and Patterson Companies, Inc. (PDCO) could be ideal bets now.
Henry Schein, Inc. (HSIC)
HSIC provides healthcare products and services primarily to office-based dental and medical practitioners. The company’s segments include Health care distribution; and Technology and value-added services.
In March 2022, HSIC announced the availability of Jarvis Analytics, a new version of its market-leading dental analytics platform for dental service organizations (DSOs). The company expects this data analytics solution would enable dental teams to make more informed and data-driven decisions that could help them identify out-of-the-box revenue streams and drive business growth. Given the growing demand for data analytics in businesses, this enhanced offering should promote the company’s long-term growth in the dental care space.
HSIC’s net sales increased 5.2% year-over-year to $3.33 billion in the fiscal fourth quarter ended December 25, 2021. Its gross profit improved 13.9% year-over-year to $979.50 million, while its operating income increased 10.7% from its year-ago value to $200.56 million. The company’s EPS for the quarter stood at $1.05, up 5% year-over-year.
Street expects HSIC’s EPS for the fiscal year ending December 2022 to improve 7.3% year-over-year to $4.85. The consensus revenue estimate of $13.14 billion for the same period represents a 6% increase year-over-year. The company also surpassed the consensus EPS estimates in each of the trailing four quarters.
HSIC has gained 20% over the past year and 18.7% over the past three months to close the last trading session at $87.29.
HSIC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, translating to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
HSIC also has a B grade in Value. It is ranked #19 of 159 stocks in the Medical – Devices & Equipment industry.
Beyond what is stated above, we have also rated HSIC for Quality, Momentum, Stability, Sentiment, and Growth. Get all the HSIC ratings here.
Click here to checkout our Healthcare Sector Report for 2022
Straumann Holding AG (SAUHY)
SAUHY is a Switzerland-based company active in the field of implant and restorative dentistry and oral tissue regeneration.
SAUHY’s revenues increased 41.8% year-over-year to CHF2.02 billion ($2.11 billion) in the fiscal year ended 2021. Its gross profit grew 49.5% from the year-ago value to CHF1.54 billion ($1.61 billion). The company’s net profit increased 332.7% year-over-year to CHF399.29 million ($417.19 million). Also, its EPS came in at CHF24.82, up 333.2% from the prior year.
Analysts expect SAUHY’s revenue for the fiscal quarter ended March 2022 to come in at $562.20 million, indicating an increase of 8.7% year-over-year. Also, the company’s revenue is expected to grow 10% year-over-year to $2.41 billion in the ongoing fiscal year. It has an impressive earnings surprise history, as it topped Street EPS estimates in three of the trailing four quarters.
SAUHY’s shares have slumped 5.9% over the past year to close the last trading session at $63.22.
SAUHY has a B grade in Stability and Quality. It is ranked #57 in the Medical – Devices & Equipment industry.
In addition to the POWR Rating grades I have just highlighted, you can see the SAUHY’s ratings for Growth, Momentum, Value, and Sentiment here.
Click here to checkout our Healthcare Sector Report for 2022
Patterson Companies, Inc. (PDCO)
PDCO distributes and sells dental and animal health products in the United States, the United Kingdom, and Canada. It operates through Dental, Animal Health, and Corporate segments.
On March 14, 2022, PDCO declared a quarterly cash dividend of $0.26 per share, payable on May 6, 2022. This demonstrates the company’s stable financial positioning.
For the fiscal third quarter ended January 29, 2022, PDCO’s net sales increased 2.9% year-over-year to $1.60 billion. Its gross profit grew 3.7% from the year-ago value to $336.61 million. Net income attributable to PDCO for the quarter stood at $57.01 million, reflecting a 16.9% increase year-over-year, while its EPS was $0.58, up 16% year-over-year.
The consensus EPS estimate of $0.56 for the fiscal first quarter ending April 2022 represents a 46.6% improvement year-over-year. The consensus revenue estimate of $1.59 billion for the same quarter represents a 2.1% increase from the same period last year. PDCO also beat the consensus EPS estimates in three of the trailing four quarters.
Over the past three months, the stock has gained 20% to close yesterday’s trading session at $33.30. It has gained 13.5% year-to-date.
The company has an overall rating of B, translating to Buy in our proprietary ratings system. PDCO is also rated B in Growth, Value, and Stability. In the Medical – Devices & Equipment industry, the stock is ranked #15.
Click here to see additional POWR Ratings for Momentum, Quality, and Sentiment for PDCO.
Click here to checkout our Healthcare Sector Report for 2022
HSIC shares were trading at $87.42 per share on Monday afternoon, up $0.13 (+0.15%). Year-to-date, HSIC has gained 12.76%, versus a -10.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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