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Medical Dental Supplies Industry Outlook: Growth Scope Wide
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The Zacks Medical Dental Supplies industry covers designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. These apart, companies offering practice management and clinical software, patient education systems, and office forms and stationery are part of this industry.
Such companies primarily have dentists, dental laboratories, institutions and healthcare professionals as customers.
Here are the three major themes in the industry:
Digital Dentistry: Latest technologies help dentists carry out minimally-invasive procedures that ensure precision and efficiency, thereby minimizing patients’ trauma. The industry participants actively promote digital workflows for general dentistry as well as dental specialties. The most recent digital systems help provide faster dental treatments and better predictability of results. Additionally, dental 3D printers are revolutionizing dentistry, drastically reducing time and costs along with raking in substantial revenues for the industry.
Laser Dentistry: Laser technology is one of the many dental trends that are taking the market by storm. Its wide array of usages include teeth whitening, removing decayed teeth, reshaping gums and eradicating lesions. This trend is fast gaining popularity as patients are less likely to require absence of anesthesia.
AI & Robotics: The dental industry is expected to scale new highs in 2019, thanks to AI, which 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. Reports suggest that AI dentistry is set to become mainstream in the dental space by 2019-end.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #59, which places it in the top 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright 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 Underperforms S&P 500 but Outperforms Sector
The industry has underperformed the Zacks S&P 500 composite but has outperformed its own sector in the past year.
Stocks in this industry have collectively lost 3.8% compared with the Zacks Medical sector’s decline of 6.4% and the S&P 500’s fall of 0.9%.
One Year Price Performance
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 15.88X compared with the S&P 500’s 16.01X and the sector’s 14.88X.
Over the last five years, the industry has traded as high as 19.99X, as low as 14.57X, and at the median of 16.77X, as the charts below show.
Price-to-Earnings Forward 12 Months (F12M)
Price-to-Earnings Forward 12 Months (F12M)
Bottom Line
Statista opines that the global dental market will grow to a value of $37 billion by 2021. Notably, extreme tobacco, sugar and alcohol intake raises the risk of chronic dental diseases, enhancing the prospects for the dental supplies industry. Further, increasing incidence of conditions like periodontitis, gingivitis, infections and oral thrush is expected to keep the industry going. An aging population has also been a significant contributor. Higher incidence of calcium deficiency in older people leads to teeth loss.
However, the industry currently faces major reimbursement challenges from insurance companies.
DENTSPLY SIRONA (XRAY - Free Report) : This 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. The company recently launched a single tooth replacement solution, Azento, in the United States to revolutionize digital-implant workflow in dental care.
The stock has rallied 27.1% in a year’s time. The medical dental supplies player has an estimated long-term earnings growth rate of 11.5%. The company has surpassed estimates in the last three quarters, the average positive earnings surprise being 5.62%.
Price and Consensus: XRAY
Align Technology (ALGN - Free Report) : This company manufactures and markets a system of clear aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services used in dentistry, orthodontics, and dental records storage.
While the stock has lost 10% in a year’s time, the medical dental supplies player has an estimated long-term earnings growth rate of 23.4%. The company has surpassed estimates in the last four quarters, the average positive earnings surprise being 8.54%.
Price and Consensus: ALGN
Henry Schein (HSIC - Free Report) : This company entered the burgeoning market of orthodontic aligners with its proprietary SLX Clear Aligner System last year. Management seems to be encouraged by the positive feedback for the product from the Key Opinion Leaders and other market participants. Henry Schein plans to increase the availability of the same through a global launch lately.
The stock has declined 4.7% in the past year. However, the company has an estimated long-term earnings growth rate of 8.3%. It has surpassed estimates in the trailing four quarters, the average positive earnings surprise being 2.53%.
Price and Consensus: HSIC
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Medical Dental Supplies Industry Outlook: Growth Scope Wide
The Zacks Medical Dental Supplies industry covers designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. These apart, companies offering practice management and clinical software, patient education systems, and office forms and stationery are part of this industry.
Such companies primarily have dentists, dental laboratories, institutions and healthcare professionals as customers.
Here are the three major themes in the industry:
Zacks Industry Rank Indicates Bright Prospects
The Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector. It carries a Zacks Industry Rank #59, which places it in the top 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright 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 Underperforms S&P 500 but Outperforms Sector
The industry has underperformed the Zacks S&P 500 composite but has outperformed its own sector in the past year.
Stocks in this industry have collectively lost 3.8% compared with the Zacks Medical sector’s decline of 6.4% and the S&P 500’s fall of 0.9%.
One Year Price Performance
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 15.88X compared with the S&P 500’s 16.01X and the sector’s 14.88X.
Over the last five years, the industry has traded as high as 19.99X, as low as 14.57X, and at the median of 16.77X, as the charts below show.
Price-to-Earnings Forward 12 Months (F12M)
Price-to-Earnings Forward 12 Months (F12M)
Bottom Line
Statista opines that the global dental market will grow to a value of $37 billion by 2021. Notably, extreme tobacco, sugar and alcohol intake raises the risk of chronic dental diseases, enhancing the prospects for the dental supplies industry. Further, increasing incidence of conditions like periodontitis, gingivitis, infections and oral thrush is expected to keep the industry going. An aging population has also been a significant contributor. Higher incidence of calcium deficiency in older people leads to teeth loss.
However, the industry currently faces major reimbursement challenges from insurance companies.
Here we present three stocks from the Medical - Dental Supplies industry with a Zacks Ranks of #2 (Buy) and positive long-term growth earnings growth rate. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DENTSPLY SIRONA (XRAY - Free Report) : This 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. The company recently launched a single tooth replacement solution, Azento, in the United States to revolutionize digital-implant workflow in dental care.
The stock has rallied 27.1% in a year’s time. The medical dental supplies player has an estimated long-term earnings growth rate of 11.5%. The company has surpassed estimates in the last three quarters, the average positive earnings surprise being 5.62%.
Price and Consensus: XRAY
Align Technology (ALGN - Free Report) : This company manufactures and markets a system of clear aligner therapy, intra-oral scanners and CAD/CAM (computer-aided design and computer-aided manufacturing) digital services used in dentistry, orthodontics, and dental records storage.
While the stock has lost 10% in a year’s time, the medical dental supplies player has an estimated long-term earnings growth rate of 23.4%. The company has surpassed estimates in the last four quarters, the average positive earnings surprise being 8.54%.
Price and Consensus: ALGN
Henry Schein (HSIC - Free Report) : This company entered the burgeoning market of orthodontic aligners with its proprietary SLX Clear Aligner System last year. Management seems to be encouraged by the positive feedback for the product from the Key Opinion Leaders and other market participants. Henry Schein plans to increase the availability of the same through a global launch lately.
The stock has declined 4.7% in the past year. However, the company has an estimated long-term earnings growth rate of 8.3%. It has surpassed estimates in the trailing four quarters, the average positive earnings surprise being 2.53%.
Price and Consensus: HSIC
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>