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Patterson Companies & Heartland Dental Form Partnership

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St. Paul, MN-based Patterson Companies Inc. (PDCO - Free Report) , a leading distributor and seller of dental and animal health products, recently announced that it has been selected as a distribution partner by Heartland Dental, the largest dental support organization (DSO) in the U.S. Notably, the partnership is expected to be effective from Jan 1, 2017.

The companies are believed to bring in ‘best-in-class products and solutions to the dentists’ with a superior combination of sales, service and exclusive technical expertise in the dental market.

Per management, the latest development would exclusively help the Patterson Dental platform to strengthen its hold and gain a leading position in the global markets. The strategic partnership also fortifies Heartland’s market position in the DSO space, as the company is about to leverage from Patterson’s expertise in logistics, technical service, ecommerce and ancillary technologies.

Patterson Dental has been a leading platform in enhancing customer experience in dental markets. Notably, the company recently adopted the ‘go-to-market’ strategy in its dental platform to address changing marketplace and customer demand. In fact, the sales-force realignment in this platform is another notable development for Patterson Companies in the recent past.

Our Take

A glimpse at the last reported quarter (first-quarter fiscal 2017) reveals that sales at the Dental platform represented 43% of total sales and decreased 3.5% to $555 million approximately (up 2.1% at constant currency) on a year-over-year basis. In our view, Patterson Companies is exclusively trying to focus on its core dental business by forming strategic partnerships like these to perform better in the coming quarters.  

We believe Patterson Companies is set to gain significant market traction in the coming quarters, taking the global market sentiments into consideration. In this regard, the global dental consumable market is forecasted to reach a worth of $35.35 billion by 2021, growing at a CAGR of 6.8%, as per a research by ‘Markets And Markets’.

Zacks Rank & Key Picks

Currently, Patterson Companies has a Zacks Rank #4 (Sell).

Better-ranked stocks in the broader medical sector include Cepheid Inc. , Healthways Inc. and PRA Health Sciences Inc. (PRAH - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cepheid has a long-term expected earnings growth rate of approximately 21.3%. Notably, the stock represents an impressive year-to-date return of 44.4%.

Healthways has a long-term expected earnings growth rate of 13.3%. The company posted a stupendous year-to-date return of 94.3%.

PRA Health Sciences has an expected earnings growth of 18%. The company posted a promising year-to-date return of almost 25.3%.
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