The dental industry was one of the hardest-hit industries by the coronavirus pandemic. Unlike other medical professionals who could still meet with patients via virtual meetings, a dental appointment must be in person. COVID-19 kept millions of people from seeking routine dental cleanings and much-needed procedures.
But all that is changing, as dental offices have increased their safety measures through office sanitizing and acquiring personal protective equipment (PPE) previously in short supply. Plus, patients have steadily returned to dental offices as the average patient volume at U.S. dental offices resurged to 78% of pre-coronavirus levels, according to a dentists poll.
With the vaccine's rollout, more and more patients are expected to return to the dentist's office. Dentists are expected to be part of one of the earlier groups of people to receive the COVID vaccines. This should provide a boon to many companies in the dental industry. The global dental equipment market is expected to grow at a compound annual rate of 12.1% from 2021 to 2028 and reach $16.5 billion by 2028. That is why I am highlighting Patterson Companies, Inc. (PDCO), DENTSPLY SIRONA Inc. (XRAY), and Henry Schein, Inc. (HSIC) below.
Patterson Companies, Inc. (PDCO)
PDCO is a leading dental distributor and wholesaler of consumable products and equipment operating through two business segments, Patterson Dental and Patterson Animal Health. The dental segment distributes consumable products such as x-ray films, restorative materials, sterilization products, and hand instruments. It also provides basic and advanced technology dental equipment.
In its most recent quarter, dental sales were up 12% year over year. This was due to dental practices reopening after being shut down and patients returning. This drove higher demand for dentistry and PDCO's products and services. The company is also expected to gain from increased marketing and promotional activities in the dental market.
The company has also been expanding from acquisitions. A business unit of PDCO, Patterson Dental Supply, recently announced that it acquired Fitzpatrick Dental Design, a dental office design and equipment dealer. PDCO has acquired over 30 dental products distributors in the United States and Canada since 1987. This has improved its penetration in both countries.
The stock is rated a "Buy" in our POWR Ratings system. It holds a grade of "A" for Trade Grade and a "B" for Buy & Hold Grade, Peer Grade, and Industry Rank. Those are the four components that make up the POWR Ratings.
DENTSPLY SIRONA Inc. (XRAY)
XRAY is one of the world's largest manufacturers and distributors of dental supplies and equipment. The company is a leader in the design, development, manufacture, and marketing of dental consumables, dental laboratory products, and dental specialty products. It provides dental technology products, including dental implants and related scanning equipment.
The company sees an improvement in sales trends with dental offices after many have reopened and increased patient visits. XRAY recently launched a single tooth replacement solution, called Azento, in a bid to revolutionize digital-implants. This bodes well for the firm as the global tooth replacement market is expected to reach $13 billion by 2023.
XRAY also recently launched PrimeScan, a digital impression scanner, which has aided top-line growth. Other products like WaveOne GOLD, X-Smart iQ, VDW, and CONNECT Drive are helping the company gain penetration in Europe. Growth will also come from emerging markets as they remain untapped with low dental product penetration.
The stock is rated a "Strong Buy" in the POWR Ratings system. It holds a grade of "A" for Trade Grade, Buy & Hold Grade, and Peer Grade, and a "B" for Industry Rank. It is also the #25 ranked stock in the Medical – Devices & Equipment industry.
Henry Schein, Inc. (HSIC)
HSIC is the largest wholesaler of dental and medical products to office-based practitioners. The company has been established for approximately 90 years and operates across nearly 30 distribution centers to offer hundreds of thousands of products to customers globally. It also offers practice management products that include software products, technical, financial, and educational services.
The company has been gaining from several favorable trends. The first is demographics, as more people are covered by dental insurance. Secondly, an aging population will generate increased healthcare expenditures. HSIC's strategy to expand digital dentistry is another encouraging sign. The company has been promoting digital workflows for dentistry practices, such as the Henry Schein One joint venture.
The project will combine dental software tools that help dentists promote their practice, communicate with existing patients, and generate new patients. In addition, all major imaging vendors have signed on with its Dentrix Smart image integration solution. HSIC also announced the acquisition of Dentally, a cloud-based U.K. dental software provider. This will help the company expand its international presence.
The stock is rated a "Strong Buy" in our POWR Ratings system. It holds a grade of "A" in Trade Grade and Buy & Hold Grade, and a "B" for Peer Grade and Industry Rank. HSIC is also the #27 ranked stock in the Medical – Devices & Equipment industry.
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PDCO shares were unchanged in after-hours trading Thursday. Year-to-date, PDCO has gained 6.64%, versus a 2.77% rise in the benchmark S&P 500 index during the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a Consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers.3 Dental Stocks That Will Make You Smile: Patterson Companies, DENTSPLY SIRONA, and Henry Schein appeared first on StockNews.com