Henry Schein (HSIC), a worldwide distributor of healthcare products and services, recently launched its new “Total Health Beyond the Mouth” program developed in collaboration with the American Academy for Oral Systemic Health. This new integrated wellness and education program reveals to patients the vital link between oral health and total health, as well as helps out dental professionals in detecting probable systemic health problems, including periodontal disease, oral cancer, sleep disorders, heart disease and diabetes.
The Journal of Periodontology notes that an initial investment in preventative periodontal health benefits patients in the long run as severe periodontal disease treatment comes at a much higher price with charges escalating 21% on an average from preventative periodontal health care costs. Henry Schein strongly believes that the Total Health Beyond the Mouth program will help patients to acknowledge preventative oral health care by increasing awareness of the oral systemic connection and, in turn, stimulating dental practice.
At present, with 78% of adults suffering from some form of periodontal disease (according to the National Institute of Dental and Craniofacial Research), only a meager 3% seek treatment (according to the American Academy of Periodontology). Thus, a huge under-penetrated market remains untapped. Besides, a number of positive demographic factors including an increasing worldwide population and a growing number of adults are catalysts for Henry Schein to expand its customer base. Going ahead, Henry Schein’s dental business is expected to gain from these industry-wide tailwinds.
Consistent growth has been a hallmark of Henry Schein over the past , and is likely to remain so in the future, despite the still uncertain economic environment. Multiple growth drivers and margin expansion capability ensure sustainable earnings growth and cash flow performance for the company.
However, competition remains tough. Henry Schein’s primary competitors in the Dental market are Patterson Companies Inc. (PDCO) and McKesson Corporation (MCK). Currently, Henry Schein retains a short-term Zacks#3 Rank (Hold), which also corresponds to our long-term ‘Neutral’ recommendation on the stock.
