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Dental Supplies Industry's Near-Term Outlook Looks Bright
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The Zacks Medical Dental Supplies industry comprises designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. It also includes companies which offer practice management and clinical software and patient education systems.
These companies primarily have dentists, dental laboratories, institutions and healthcare professionals as customers.
Some of the key players in this industry are Laboratory Corporation of America Holdings (LH - Free Report) , Patterson Companies (PDCO - Free Report) , The Cooper Companies (COO - Free Report) , Cardinal Health (CAH - Free Report) , Becton, Dickinson and Company (BDX - Free Report) , AmerisourceBergen Corporation and McKesson Corporation (MCK - Free Report) .
Let’s take a look at the three major themes in the industry:
Digital Dentistry: The 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, 3D printing in dentistry has been one of the most consistent trends. Notably, 3D printing facilitates the making of dentures and crowns in lesser time and customization of the same.
Laser Dentistry: Laser technology is taking the market by storm. Its wide array of usages includes teeth whitening, removing decayed teeth, reshaping gums and eradicating lesions. This trend is fast gaining popularity as patients are less likely to require 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 will 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 #95, which places it in the top 37% 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 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 and Sector
The industry has underperformed the Zacks S&P 500 composite and its own sector in the past year.
Stocks in this industry have collectively lost 16.5% compared with the Zacks Medical sector’s decline of 10.7% and against the S&P 500’s rally of 7.2%.
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 16.24X compared with the S&P 500’s 16.96X and the sector’s 18.85X.
Over the last five years, the industry has traded as high as 17.08X, as low as 13.65X, and at the median of 16.24X, as the charts below show.
Price-to-Earnings Forward Twelve Months (F12M)
Price-to-Earnings Forward Twelve Months (F12M)
Bottom Line
According to a Medgadget report, the dental industry mainly rides on technological advancements and the increasing uptake of dental consumables. Other factors like a widely growing geriatric populace and a surge in dental surgeries are propellers of growth.
Reflective of these, the global dental consumables market is expected to reach a worth of $28.34 billion by 2024.
DENTSPLY SIRONA (XRAY - Free Report) : This company excels in designing, developing, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. The company has launched a single tooth replacement solution, Azento, in the United States to revolutionize digital-implant workflow in dental care.
The stock has rallied 49.4% in a year’s time. The medical dental supplies player has an estimated long-term earnings growth rate of 11.6%. The company has surpassed estimates in the last three quarters, the average positive surprise being 6.81%.
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 36.9% in a year’s time, the medical dental supplies player has an estimated long-term earnings growth rate of 24.3%. The company has surpassed estimates in the last four quarters, the average positive surprise being 9.02%.
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 in recent times. 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 expand the availability of the same through a global launch lately.
The stock has declined 25.8% in the past year. However, the company has an estimated long-term earnings growth rate of 7.5%. It has surpassed estimates in the trailing four quarters, the average positive surprise being 2.34%.
Price and Consensus: HSIC
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Dental Supplies Industry's Near-Term Outlook Looks Bright
The Zacks Medical Dental Supplies industry comprises designers, developers, manufacturers and marketers of dental consumables, dental laboratory products and dental specialty items. It also includes companies which offer practice management and clinical software and patient education systems.
These companies primarily have dentists, dental laboratories, institutions and healthcare professionals as customers.
Some of the key players in this industry are Laboratory Corporation of America Holdings (LH - Free Report) , Patterson Companies (PDCO - Free Report) , The Cooper Companies (COO - Free Report) , Cardinal Health (CAH - Free Report) , Becton, Dickinson and Company (BDX - Free Report) , AmerisourceBergen Corporation and McKesson Corporation (MCK - Free Report) .
Let’s take a look at 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 #95, which places it in the top 37% 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 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 and Sector
The industry has underperformed the Zacks S&P 500 composite and its own sector in the past year.
Stocks in this industry have collectively lost 16.5% compared with the Zacks Medical sector’s decline of 10.7% and against the S&P 500’s rally of 7.2%.
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 16.24X compared with the S&P 500’s 16.96X and the sector’s 18.85X.
Over the last five years, the industry has traded as high as 17.08X, as low as 13.65X, and at the median of 16.24X, as the charts below show.
Price-to-Earnings Forward Twelve Months (F12M)
Price-to-Earnings Forward Twelve Months (F12M)
Bottom Line
According to a Medgadget report, the dental industry mainly rides on technological advancements and the increasing uptake of dental consumables. Other factors like a widely growing geriatric populace and a surge in dental surgeries are propellers of growth.
Reflective of these, the global dental consumables market is expected to reach a worth of $28.34 billion by 2024.
Here we present three stocks from the Medical - Dental Supplies industry with a Zacks Rank #3 (Hold) and have solid long-term growth potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DENTSPLY SIRONA (XRAY - Free Report) : This company excels in designing, developing, manufacturing and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. The company has launched a single tooth replacement solution, Azento, in the United States to revolutionize digital-implant workflow in dental care.
The stock has rallied 49.4% in a year’s time. The medical dental supplies player has an estimated long-term earnings growth rate of 11.6%. The company has surpassed estimates in the last three quarters, the average positive surprise being 6.81%.
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 36.9% in a year’s time, the medical dental supplies player has an estimated long-term earnings growth rate of 24.3%. The company has surpassed estimates in the last four quarters, the average positive surprise being 9.02%.
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 in recent times. 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 expand the availability of the same through a global launch lately.
The stock has declined 25.8% in the past year. However, the company has an estimated long-term earnings growth rate of 7.5%. It has surpassed estimates in the trailing four quarters, the average positive surprise being 2.34%.
Price and Consensus: HSIC
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>