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Henry Schein (HSIC) Clinches HHS Deal for COVID-19 Supplies

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Henry Schein, Inc. (HSIC - Free Report) recently made a major breakthrough in the line of pandemic response on achieving a $53.4-million national stockpile contract. The contract has been formed with the U.S. Department of Health and Human Services (HHS) under which the company will provide storage and innovative logistic support for 80,000 pallets of personal protective equipment (PPE) and COVID related products to health-care professionals.

The contract is in support of the HHS’ Office of Assistant Secretary for Preparedness and Response’s (ASPR) strategy to fortify its Strategic National Stockpile (SNS) unit.

The collaboration with SNS will facilitate the delivery of additional resources and infrastructure crucial to front-line response, while leveraging SNS’ ability to supplement state and local medical supplies in response to the COVID-19 pandemic and further public health emergencies.

Henry Schein’s Response to COVID-19

With a long history of serving the U.S. Government, Henry Schein has been quick and efficient in assisting the government to source and expand the availability of PPE and ensure adequate distribution of emergency medical supplies at the point of care. It has also collaborated with HHS COVID-19 Supply Chain Task Force and SNS to deliver emergency products to COVID-19 testing sites.

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In its earnings call for the first quarter of 2021, Henry Schein reported Global Medical sales growth of 24% year over year, largely driven by strong demand for PPE and COVID-related products.

Industry Prospects

Per a report published in Grand View Research, the global personal protective equipment market size is expected to see a CAGR of 7.3% from 2020 to 2028. Increasing concern regarding safety to curb transmission of pathogens, various government initiatives like the Families First Coronavirus Response Act by the United States for protecting public health workers, growing domestic production coupled with restraints on the product imports and exports, constant innovation in development of lighter and comfortable industrial protective equipment are among the key factors expected to fuel market growth in the forecast period.

Notable Developments

In May 2021, the company’s subsidiary unit, Henry Schein One, acquired an 80% ownership position in Jarvis Analytics. This partnership is expected to advance analytics solutions and services to dental practitioners through the subsidiary unit. This will thus enable them to make effective use of practice management data and convert them to powerful insights to diagnose patients, improve business and make effective decisions.

In March 2021, Henry Schein announced a majority investment in Stradis Medical, LLC (Stradis Healthcare), which offers medical device packaging and custom procedure kits and trays ranging from IV start kits to major surgery back table quality products. This investment is expected strengthen the company’s foothold in the growing ambulatory surgery market by combining both their product portfolios and capabilities to offer a custom kitting, contract packaging and serialized pharmaceutical organization.

In the same month, the company partnered with the Black Coalition Against COVID-19 (BCAC). This collaboration is expected to fortify the company’s efforts to ensure equitable access to the COVID-19 vaccine, especially in minority communities and advocate the vital role of primary-care physicians and other office-based health care practitioners in expanding vaccination sites in the United States.

Share Price Performance

The stock has underperformed its industry over the past year. It has grown 20.3% compared to the industry’s 24.3% growth

Zacks Rank and Other Key Picks

Currently, Henry Schein carries a Zacks Rank #2 (Buy).

A few similar-ranked stocks from the Medical-Dental Supplies industry include Straumann Holding AG (SAUHF - Free Report) , CONMED Corp. (CNMD - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .

Straumann Holding has a long-term earnings growth rate of 11.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

CONMED has a long-term earnings growth rate of 9.90%.

West Pharmaceutical has a long-term earnings growth rate of 25.80%.

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