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3 Best Dental Stocks to Keep An Eye On

Sriparna Ghosal

The U.S. dental supply industry has been of late seeing a rise in the usage of dental practice management software. While prominent players like Henry Schein HSIC are striving to make an entry into this space, it is time investors cash in on this industry’s untapped prospects.

A Glance at Henry Schein’s Deal

Henry Schein recently entered Italy’s dental practice management software market with the takeover of Elite Computer Italia S.r.L. — a full-service software company providing high-tech management solutions to dental practices and laboratories in the country.The acquisition is in sync with Henry Schein One's strategy to deliver integrated technology platforms that enhance the productivity of dental teams and patient experience.

Dental Practices Management Software in Demand

Dental practice management software comprises tools and products which enable dentists and associated healthcare professionals monitor day-to-day operations like appointment scheduling, document storage and sharing, contact databases, filing and tracking insurance claims, dental history charting, patient records, and treatment plans. This software also helps dental businesses run smoothly by ensuring safe storage and easy access of critical information.

Meanwhile, rising use of digital automation technologies is reshaping the labor market across industries. Within the dental space, experts are massively adopting practice management tools to restructure, organize and lessen the pressure of daily processes, both in and outside offices.

Further, with rising awareness of oral health in the United States and Europe, and rapid innovation within the dental space, this space is currently the focal point of industry majors.

Market Prospect

Per Mordor Intelligence, the dental practice management software market is expected to see a CAGR of 10.5% in the 2019-2024 period.

3 Dental Stocks to Focus On

We have selected three companies, which we believe are well poised to provide impressive long-term returns given the encouraging prospects of the global dental supply industry.These stocks have a favorable estimate revision trend.

DENTSPLY SIRONA, Inc. XRAY

This Zacks Rank #2 (Buy) company is a global leader in the design, development, manufacture and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. Over the past 60 days, eight estimates for the company's current-year earnings have been revised higher. Resultantly, the Zacks Consensus Estimate for earnings per share rose around 1.7% to $2.39. The stock has gained 31.9% against the industry’s fall of 8.3% over the past year.

 

 

The company is fortifying its foothold in the highly competitive MedTech space with high-end products like PrimeScan and GP Ortho software. Apart from this, new products like WaveOne GOLD, X-Smart iQ, VDW and CONNECT Drive are expected to expand the company’s presence in Europe.

Henry Schein, Inc.

This Zacks Rank #3 (Hold) company is a leading distributor of health care products and services across the globe, with the lion’s share of revenues coming from its Dental business. Meanwhile, over the past 30 days, three estimates for the company's current-year earnings have been revised higher. Resultantly, the Zacks Consensus Estimate for earnings per share inched up 0.3% to $3.46. The stock has risen 5.9% compared with the industry’s rise of 2.3% over the past six months.

Henry Schein’s strategy to expand digital dentistry globally is encouraging.
The company’s recent joint venture (JV), Henry Schein One, is working on combining a host of unique and powerful dental software tools that help dentists build awareness for their practice and better communicate with existing patients. In line with this, a number of major imaging vendors have now signed up for Henry Schein’s Dentrix Smart image integration solution. Apart from this, through its cloud-based dental practice management system, Dentrix Ascend, Henry Schein continues to focus on enhancing practice and patient experience.

Henry Schein recently entered into an agreement to buy Lighthouse 360 from the Web.com which will enable the company to provide easy-to-use dental practice management and patient communication software.

Patterson Companies, Inc. PDCO

This Zacks Rank #3 company is one of the leading distributors of dental and animal health products. Over the past 30 days, two estimates for the company’s current-year earnings have moved up. However, the Zacks Consensus Estimate for the same was unchanged in this period. The stock has lost 33% compared with the industry’s fall of 8.3% over the past year. Despite the stock’s underperformance, it is well poised to make a comeback on solid long-term prospects.

It is encouraging to note that Patterson Companies witnessed a solid pick-up in dental sales in the last-reported quarter, driven by robust equipment performance on double-digit growth in the CAD/CAM and core equipment categories.

Patterson Companies has been expanding through strategic acquisitions. In the recent past, Patterson Dental Supply, Inc., a business unit of Patterson Companies, announced the takeover of Fitzpatrick Dental Design, a dental office design and dental equipment dealer. The deal has helped strengthen Patterson Companies’ equipment designs and expand its dental business capabilities.

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Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
 
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