- Now that the country looks more normal than ever since the start of the pandemic, people need to take care of their health holistically, which could benefit these dental stocks to buy.
- Henry Schein (HSIC): North America’s largest dental supply company, HSIC is the name to have as Americans head back to the dentist’s office.
- McKesson (MCK): A pharmaceutical distributor and manufacturer of various medical supplies, McKesson offers a range of oral care products.
- Becton Dickinson and Co. (BDX): Offering various products for medical care needs, BDX is a well-rounded idea among dental stocks to buy.
- CardinalHealth (CAH): A provider of dental needles and syringes, these scary-looking core products may see increased demand in the months and years ahead.
- Patterson Companies (PDCO): A one-stop shop for dental practices, Patterson also offers animal health services, which itself is a booming business.
- Align Technology (ALGN): Though a dangerously volatile idea, ALGN’s premium is starting to look more attractive from the broader market volatility.
- SmileDirectClub (SDC): Easily one of the riskiest ideas among dental stocks to buy, SDC could rise on the return to normal.
Even under the best of circumstances, going to the dentist’s office isn’t most people’s idea of a good time. So, when the coronavirus pandemic struck, it offered a readymade excuse for individuals who don’t like their mouths to be poked with sharp instruments to avoid routine checkups. But now that the Covid-19 crisis is starting to fade into the background, dental stocks to buy could be in high demand.
As the Washington Post implied, dental stocks to buy may become beneficiaries of the bounce-back effect. Following a roughly two-year hiatus from the dentist’s office, waiting rooms are filling up with patients who face emotional obstacles in their return. While I don’t want to make a bad situation worse, eschewing oral care may lead to more serious consequences later. Certainly, many patients are going to find out the hard way.
To be fair, the folks who avoided care had reason to do so. When the pandemic initially capsized society, both patients and care providers were pensive. Making matters worse, stress related to the global health crisis can cause issues like reduced saliva production. This in turn compromises oral health as saliva protects your teeth from cavities.
But now that many can no longer avoid their health concerns, these dental stocks to buy may rise higher over the next several months. Yes, it’s cynical, but in this environment cynicism sells.
|HSIC||Henry Schein, Inc.||$85.37|
|BDX||Becton, Dickinson and Company||$253.70|
|CAH||Cardinal Health, Inc.||$57.72|
|PDCO||Patterson Companies, Inc.||$32.17|
|ALGN||Align Technology, Inc.||$273.39|
Dental Stocks to Buy: Henry Schein (HSIC)
Being North America’s largest dental supply company, any list of dental stocks to buy would not be complete without mentioning Henry Schein (NASDAQ:HSIC). Even better, the market recognizes the underlying business’ importance. While the underlying Nasdaq index is down in bear market territory on a year-to-date basis, HSIC is up approximately 10% over the same frame.
Fundamentally, the company is a name you can trust. In 2020, Henry Schein generated $10 billion in revenue, a little over 1% up from 2019’s result. Last year, it rang up $12.4 billion in sales, up almost 23% from the prior year’s tally. And in the fourth quarter of 2021, it expanded the top line by over 5% on a year-over-year basis.
Moving forward, it’s very much possible for HSIC to continue making positive gains. Cynically, dental care is easy to put off, but the consequences can be costly. Again, many folks are going to learn the hard way, which is why it’s one of the best dental stocks to buy.
A powerhouse in the broader healthcare space, McKesson (NYSE:MCK) distributes pharmaceuticals and provides medical supplies and care management tools. Additionally, the company specializes in health information technology, giving the firm holistic exposure to all things care related. Therefore, it’s not just specific to dental stocks to buy, but covers practically any medical angle you can think of.
Certainly, this wide surface area has helped distinguish MCK from the competition. On a YTD basis, shares are up around 33%, a staggering figure against the otherwise terrible backdrop in the equities sector. Part of the reason (if not the main reason) is that recession or not, people can’t avoid medical and dental care. Well, they can but again, the consequences of apathy can be severe.
To be fair, the one concern about the company is in the financials, with McKesson absorbing a net loss in its fiscal year ended March 31, 2021. However, since the quarter ended in the aforementioned date, the net income line has dramatically improved. As well, the company is killing it on the top line, with the quarter ended Dec. 31, 2021 seeing an expansion of 10% YOY.
Dental Stocks to Buy: Becton Dickinson and Co. (BDX)
A well-recognized name in the medical and scientific communities, Becton Dickinson and Co. (NYSE:BDX) offers various products for medical care needs. Like McKesson above, BDX represents one of the well-rounded dental stocks to buy. While you can buy shares for its exposure to the target industry, the company is pertinent in many other care segments.
To be clear, Becton Dickinson aligns more with a conservative investing methodology. On a YTD basis, BDX is up around 3%, a modest gain under normal circumstances. But given the wild trading we’ve seen in the major indices, 3% up is still a positive return. As well, the company has a dividend yield of 1.35%. It’s nothing to write home about but it’s there.
Arguably, though, the main appeal for BDX is financial stability. In its fiscal year ended Sept. 30, 2020, BDX’s revenue was almost at parity against the prior year’s result. In the following fiscal year, the company generated over $20 billion in sales, representing an 18% YOY lift.
An American multinational healthcare services firm, CardinalHealth (NYSE:CAH) provides myriad medical products covering a range of industries and patient needs. Regarding dental stocks to buy, CardinalHealth supplies dental needles and syringes. These scary-looking instruments — they hurt going in, don’t let anyone tell you otherwise — are not pleasant but they are relevant.
Unfortunately, while the Covid-19 crisis may have been a boon for vaccine developers and companies specializing in infectious disease treatments, the pandemic hasn’t been a friend to providers of elective services. Indeed, there were fears early in the crisis that many private practices could close. Thankfully, the country has done a decent job of recovering from Covid, which entails a return to the dentist’s office.
But like the Washington Post stated, some patients will have more serious conditions due to the time away from dental care. Therefore, CAH should see a cynical demand uptick, making it one of the better dental stocks to buy.
Dental Stocks to Buy: Patterson Companies (PDCO)
One of the most recognized names within dental stocks to buy, Patterson Companies (NASDAQ:PDCO) has a separate division dedicated to essentially being a one-stop shop for dental practitioners. From instruments to software solutions, Patterson brings dentistry to the 21st century. This should help alleviate administrative concerns that patients have about returning to the office — though they’re still going to have to gird themselves for possible physical pain.
Patterson is also an excellent name among dental stocks to buy because it features a multivariate business profile. In addition to the relevant dental care unit, it’s also involved in veterinary care. According to the American Pet Products Association, pet parents spent $34.3 billion in vet care and product sales in 2021. Such sentiment isn’t likely to fade unless we have a catastrophic recession.
Like the other dental stocks to buy on this list, PDCO is making good on the charts, gaining around 10% YTD. With two relevant businesses under its belt, you can reasonably expect Patterson to succeed during these trying times.
Align Technology (ALGN)
Now that we’ve covered the safer or more reputable names among dental stocks to buy, it’s time to ramp up the risk-reward profile with Align Technology (NASDAQ:ALGN). While Align may not be a household name per say, it’s famous for its Invisalign system, which is billed as the most advanced clear aligner system in the world.
According to its website, Invisalign “is used for straightening teeth with a series of custom-made aligners for each patient. It is a combination of proprietary virtual modeling software, rapid manufacturing processes and mass customization, and custom-made aligners with patented aligner material.”
It sounds great, but the issue is that ALGN stock has tanked about 58% YTD, scaring off many would-be buyers. However, it’s also possible that the selloff could be overdone. In 2021, the company generated $3.95 billion in sales, up 60% from the prior year. And in Q1 2022, revenue expanded by 9%.
Dental Stocks to Buy: SmileDirectClub (SDC)
A teledentistry company, SmileDirectClub (NASDAQ:SDC) presents a convenient alternative to braces. In an easy three-step process, patients receive 3D imaging of their teeth, then a meeting with state-licensed doctors to custom-create a treatment plan, finally culminating in the shipment of clear aligners. It sounds so smooth and streamlined, but you should be under no illusion: SDC stock is risky.
First, on a YTD basis, SDC has plunged approximately 33%. Further, over the trailing year, it’s dropped around 81%. Even worse, if you go to its first publicly traded day SDC stock has gone nowhere but down, shedding over 91% since 2019.
Second, the fundamentals are problematic, with the company awash in annual net losses. Because the market sentiment moving forward may favor value over growth, this red ink is a serious distraction.
At the same time, the return to normal could incentivize people to look their best, especially if the work-from-home experiment ends. Again, it’s a speculative trade for gamblers, but it might just work out.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.