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Zacks Industry Outlook Highlights Becton, Dickinson and Company, Patterson Companies and SmileDirectClub
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 2, 2022 – Today, Zacks Equity Research discusses Becton, Dickinson and Company (BDX - Free Report) , Patterson Companies (PDCO - Free Report) and SmileDirectClub .
The COVID-19 pandemic — a biological crisis of unprecedented nature — has altered the nature and dynamics of the healthcare industry. The Zacks Medical - Dental Supplies industry bore the brunt of the closure of dental practices and lower patient visits due to the risk of exposure to the virus. However, the dental market has experienced substantial recovery, primarily owing to the easing of prior restrictions and mass vaccinations. Apart from this, rising dependence on Artificial Intelligence (AI) & Robotics and teledentistry and an increase in the number of patient visits are likely to help the industry thrive in the near term.
Despite a disruption triggered by the COVID-19 resurgence, particularly in December and January, the industry players have not shown signs of slowing down yet. Industry participants like Becton, Dickinson and Company, Patterson Companies and SmileDirectClub are likely to gain from the existing opportunities.
Industry Description
This industry primarily comprises designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. Some of the industry participants also provide practice management and clinical software, patient education systems, and office forms and stationery. The dental stocks have been gaining significant attention post the weakness witnessed during the pandemic-induced disruptions. This space has continued to show signs of recovery and held its ground. Notably, dental care is being delivered safely, following the guidance and recommendations of the American Dental Association (“ADA”) and CDC. Backed by the rebound witnessed by the companies in this space, patient volume continues to see an encouraging increase despite the COVID-19 resurgences in the past several months.
Major Trends Shaping the Future of the Medical Dental Supplies Industry
Rising Dependence on Teledentistry: Following the COVID-19 outbreak, most dental practices were unable to offer routine services in the office. Teledentistry, which is a provision to offer dental services through interactive video, audio or other electronic media to provide consultation, diagnosis and treatment, helped clinicians and patients amid this crisis. Dependence on teledentistry will continue to increase during the pandemic and beyond as it enhances patient care. The introduction of digital solutions has helped dental professionals to conduct video consultations with existing patients, thereby enhancing treatment efficiency.
Digital Influence: The latest technologies help dentists in carrying out minimally-invasive procedures that ensure precision and efficiency, thereby reducing patients’ trauma. The industry players actively promote digital workflows for general dentistry and dental specialties. Further, dental 3D printers are revolutionizing dentistry. These reduce time and cost through efficient utilization of orthodontics and dental practices. In fact, dental 3D printers became mainstream in 2020.
AI & Robotics: AI has been shaping the dental industry for quite some time now. This decade is likely to see the rise of computing power, which has become more accessible and affordable for dental practitioners. It will transform the way dentists work, and patients receive treatment, especially with the introduction of robot dentists. Robots are now able to perform minimally-invasive dental work like filling cavities and extracting teeth. A report by National Business Capital & Services suggests that AI dentistry had already become mainstream by 2019-end.
Zacks Industry Rank
The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector.
It carries a Zacks Industry Rank #174, which places it in the bottom 31% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few dental supplies stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Performance
The industry has outperformed its own sector in the past year but fallen short of the S&P 500 composite in the same time frame.
Stocks in this industry have collectively declined 11.8% against the Zacks Medical sector’s decline of 17.6%. The S&P 500 has declined 6.5% in the same time frame.
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing medical stocks, the industry is currently trading at 17.38 compared with the S&P 500’s 17.92 and the sector’s 21.57.
Over the last five years, the industry has traded as high as 20.15X and as low as 13.4X, with the median being at 17.48X.
3 Promising Dental Supplies Stocks
Becton, Dickinson and Company: Becton, Dickinson and Company, commonly known as BD, is a medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents. In its fiscal second quarter ending in March, the company achieved 2.1% growth in its top line, which beat market expectations. BD’s Medical and Interventional segments reflected robust demand while the Life Sciences segment sales declined due to lower COVID-only testing. We note that BD generates a substantial amount of its revenues from international operations. The revenues BD reports with respect to its operations outside the United States may be affected by fluctuations in foreign currency exchange rates. BD expects its full fiscal year revenues to be in the range of $19.6 billion-$19.8 billion and adjusted earnings per share in the range of $12.85-$13.00. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
However, for this Franklin Lakes, NJ-based company, the Zacks Consensus Estimate for fiscal 2022 revenues indicates a decline of 8.1%, while the same for earnings suggests a decline of 14.3%. It has a trailing four-quarter earnings surprise of 12.99%, on average.
Patterson Companies: It is one of the leading distributors of dental and animal health products. The company has been gaining on the back of a broad product line. A robust fourth-quarter fiscal 2022 performance, along with a promising dental market, is expected to contribute further. We are optimistic about Patterson Companies’ wide range of consumable supplies, equipment and software, and value-added services. Gradual recovery in the dental market and the rebounding dental equipment business (especially in North America), assisted by increased technology marketing/promotional activities, is expected to be advantageous for Patterson Companies.
The company also saw solid performance in its Animal Health segment during the fiscal fourth quarter. However, rising costs amid ongoing supply chain challenges are likely to hurt margins going forward. The company projects adjusted EPS in the range of $2.25 to $2.35 for fiscal 2023.
For this St. Paul, MN-headquartered company, the Zacks Consensus Estimate for fiscal 2023 revenues suggests growth of 2.2%, while the same for earnings indicates an increase of 1.3%. It has a trailing four-quarter earnings surprise of 16.49%, on average. Presently, the company carries a Zacks Rank of 2.
SmileDirectClub: It is an oral care company and claims to be the creator of the first MedTech platform for teeth straightening. Through the company’s new-generation teledentistry technology and vertically integrated model, SmileDirectClub is playing a key role in the advancement of the oral care industry. The company’s continued investments to influence consumer decision-making and penetrate new demographics seem strategic. A series of cutting-edge innovations, strategic distribution and insurance partnerships are added positives.
Although SmileDirectClub’s top line declined 23.9% during the last reported quarter, it beat the Zacks Consensus Estimate by 10.9%. In May, the company added the new Wireless Premium Teeth Whitening Kit to its best-in-class oral care product offerings that may drive demand for its products going forward. The company expects total revenues in the range of $600 million to $650 million in 2022.
For this Nashville, TN-based company, the Zacks Consensus Estimate for fiscal 2022 revenues suggests a decline of 4.2%. However, the Zacks Consensus Estimate for loss per share implies an improvement of 32.4%. Currently, the company carries a Zacks Rank #2.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights Becton, Dickinson and Company, Patterson Companies and SmileDirectClub
For Immediate Release
Chicago, IL – August 2, 2022 – Today, Zacks Equity Research discusses Becton, Dickinson and Company (BDX - Free Report) , Patterson Companies (PDCO - Free Report) and SmileDirectClub .
Industry: Medical – Dental Supplies
Link to article: https://www.zacks.com/commentary/1961441/3-dental-supplies-stocks-to-buy-amid-industry-headwinds
The COVID-19 pandemic — a biological crisis of unprecedented nature — has altered the nature and dynamics of the healthcare industry. The Zacks Medical - Dental Supplies industry bore the brunt of the closure of dental practices and lower patient visits due to the risk of exposure to the virus. However, the dental market has experienced substantial recovery, primarily owing to the easing of prior restrictions and mass vaccinations. Apart from this, rising dependence on Artificial Intelligence (AI) & Robotics and teledentistry and an increase in the number of patient visits are likely to help the industry thrive in the near term.
Despite a disruption triggered by the COVID-19 resurgence, particularly in December and January, the industry players have not shown signs of slowing down yet. Industry participants like Becton, Dickinson and Company, Patterson Companies and SmileDirectClub are likely to gain from the existing opportunities.
Industry Description
This industry primarily comprises designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. Some of the industry participants also provide practice management and clinical software, patient education systems, and office forms and stationery. The dental stocks have been gaining significant attention post the weakness witnessed during the pandemic-induced disruptions. This space has continued to show signs of recovery and held its ground. Notably, dental care is being delivered safely, following the guidance and recommendations of the American Dental Association (“ADA”) and CDC. Backed by the rebound witnessed by the companies in this space, patient volume continues to see an encouraging increase despite the COVID-19 resurgences in the past several months.
Major Trends Shaping the Future of the Medical Dental Supplies Industry
Rising Dependence on Teledentistry: Following the COVID-19 outbreak, most dental practices were unable to offer routine services in the office. Teledentistry, which is a provision to offer dental services through interactive video, audio or other electronic media to provide consultation, diagnosis and treatment, helped clinicians and patients amid this crisis. Dependence on teledentistry will continue to increase during the pandemic and beyond as it enhances patient care. The introduction of digital solutions has helped dental professionals to conduct video consultations with existing patients, thereby enhancing treatment efficiency.
Digital Influence: The latest technologies help dentists in carrying out minimally-invasive procedures that ensure precision and efficiency, thereby reducing patients’ trauma. The industry players actively promote digital workflows for general dentistry and dental specialties. Further, dental 3D printers are revolutionizing dentistry. These reduce time and cost through efficient utilization of orthodontics and dental practices. In fact, dental 3D printers became mainstream in 2020.
AI & Robotics: AI has been shaping the dental industry for quite some time now. This decade is likely to see the rise of computing power, which has become more accessible and affordable for dental practitioners. It will transform the way dentists work, and patients receive treatment, especially with the introduction of robot dentists. Robots are now able to perform minimally-invasive dental work like filling cavities and extracting teeth. A report by National Business Capital & Services suggests that AI dentistry had already become mainstream by 2019-end.
Zacks Industry Rank
The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector.
It carries a Zacks Industry Rank #174, which places it in the bottom 31% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bleak near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few dental supplies stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Performance
The industry has outperformed its own sector in the past year but fallen short of the S&P 500 composite in the same time frame.
Stocks in this industry have collectively declined 11.8% against the Zacks Medical sector’s decline of 17.6%. The S&P 500 has declined 6.5% in the same time frame.
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E) ratio, which is commonly used for valuing medical stocks, the industry is currently trading at 17.38 compared with the S&P 500’s 17.92 and the sector’s 21.57.
Over the last five years, the industry has traded as high as 20.15X and as low as 13.4X, with the median being at 17.48X.
3 Promising Dental Supplies Stocks
Becton, Dickinson and Company: Becton, Dickinson and Company, commonly known as BD, is a medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents. In its fiscal second quarter ending in March, the company achieved 2.1% growth in its top line, which beat market expectations. BD’s Medical and Interventional segments reflected robust demand while the Life Sciences segment sales declined due to lower COVID-only testing. We note that BD generates a substantial amount of its revenues from international operations. The revenues BD reports with respect to its operations outside the United States may be affected by fluctuations in foreign currency exchange rates. BD expects its full fiscal year revenues to be in the range of $19.6 billion-$19.8 billion and adjusted earnings per share in the range of $12.85-$13.00. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
However, for this Franklin Lakes, NJ-based company, the Zacks Consensus Estimate for fiscal 2022 revenues indicates a decline of 8.1%, while the same for earnings suggests a decline of 14.3%. It has a trailing four-quarter earnings surprise of 12.99%, on average.
Patterson Companies: It is one of the leading distributors of dental and animal health products. The company has been gaining on the back of a broad product line. A robust fourth-quarter fiscal 2022 performance, along with a promising dental market, is expected to contribute further. We are optimistic about Patterson Companies’ wide range of consumable supplies, equipment and software, and value-added services. Gradual recovery in the dental market and the rebounding dental equipment business (especially in North America), assisted by increased technology marketing/promotional activities, is expected to be advantageous for Patterson Companies.
The company also saw solid performance in its Animal Health segment during the fiscal fourth quarter. However, rising costs amid ongoing supply chain challenges are likely to hurt margins going forward. The company projects adjusted EPS in the range of $2.25 to $2.35 for fiscal 2023.
For this St. Paul, MN-headquartered company, the Zacks Consensus Estimate for fiscal 2023 revenues suggests growth of 2.2%, while the same for earnings indicates an increase of 1.3%. It has a trailing four-quarter earnings surprise of 16.49%, on average. Presently, the company carries a Zacks Rank of 2.
SmileDirectClub: It is an oral care company and claims to be the creator of the first MedTech platform for teeth straightening. Through the company’s new-generation teledentistry technology and vertically integrated model, SmileDirectClub is playing a key role in the advancement of the oral care industry. The company’s continued investments to influence consumer decision-making and penetrate new demographics seem strategic. A series of cutting-edge innovations, strategic distribution and insurance partnerships are added positives.
Although SmileDirectClub’s top line declined 23.9% during the last reported quarter, it beat the Zacks Consensus Estimate by 10.9%. In May, the company added the new Wireless Premium Teeth Whitening Kit to its best-in-class oral care product offerings that may drive demand for its products going forward. The company expects total revenues in the range of $600 million to $650 million in 2022.
For this Nashville, TN-based company, the Zacks Consensus Estimate for fiscal 2022 revenues suggests a decline of 4.2%. However, the Zacks Consensus Estimate for loss per share implies an improvement of 32.4%. Currently, the company carries a Zacks Rank #2.
Why Haven’t You Looked at Zacks' Top Stocks?
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.