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Larry Alton
Larry Alton
Articles (24)  | Author's Website |

With Innovation Booming, Dental Stocks Will Make You Smile

As you look for ways to diversify your portfolio within health care, be sure to give the dental industry some attention

December 05, 2017 | About:

While any savvy investor has a portion of their portfolio diversified into the health care sector, very few make it a point to focus on specific health care niches. However, if you actually take the time to do some due diligence in this area, you will find the dental industry is booming (and will be for some time).

Keep an eye on these three stocks in the new year

In the Scientific American, Sharon Guynup writes, “The digital revolution that is transforming every aspect of our world is also impacting dentistry and medicine in a multitude of ways, from electronic record-keeping and data analysis to new diagnostic tools, novel prevention methods—and revolutionary treatment options.”

Most people are aware of some of the larger trends occurring in the health care sector, but few outside of the dental industry understand just how much innovation is occurring in this space. From an investment perspective, there is no cap on future growth.

From 3-D imaging and intraoral cameras to digital impressions and the democratization of oral care, new technology is making dental care more efficient than ever before.

“Experts say that technological innovation will ultimately improve and broaden access to dental care,” Guynup continues, “allowing for same-day care that translates to fewer office visits—making a healthy smile more affordable.”

The question is, which companies stand to benefit the most – in terms of delivering value for investors? Let’s take a look at some of the top stocks you should keep an eye on.

1. Dentsply Sirona

With a robust $14 billion market cap, Dentsply Sirona Inc. (NASDAQ:XRAY) is by far the largest supplier of professional dental products and technologies in the world. If you have been to a dentist in the past couple of years, chances are you have had direct interaction with one or more products from this company.

Prior to last year, this company was actually two separate entities: Dentsply – a leader in dental consumables – and Sirona – a leader in equipment and technology. With the merger,  Dentsply Sirona is now able to leverage the strengths of each and enjoy better cost savings, which are passed on to dentists and consumers. The result, thus far, has been healthy growth. Since August of this year, the stock is up more than 25%.

2. Align Technology

Align Technology Inc. (NASDAQ:ALGN), maker of the popular Invisalign braces, has been one of the most successful stocks over the past five years of any stock in any sector. Going back to the end of 2013, Align has exploded to the tune of 880%-plus growth. Rewind just to the beginning of 2017 and the stock has grown more than 160%. Look for steady growth to continue as Invisalign gains steam.

3. Colgate-Palmolive

The Colgate-Palmolive Co. (NYSE:CL) is a consumer products company that is heavily involved in the dental industry. In addition to oral and personal health care products, the company also sells pet nutrition and homecare items.

After a strong quarterly report in the fall, Colgate-Palmolive is expected to see even more gains in the fourth quarter. A number of hedge funds and institutional investors recently added to their stakes in the stock, which signals a bright future ahead.

While Colgate-Palmolive has been a little up and down over the past several years, those who have stuck with their investment have seen steady gains. It is a safe bet with a high floor and predictable ceiling.

Putting it all together

As you look for ways to diversify your portfolio within health care, be sure to give the dental industry some attention. Between the stocks mentioned in this article as well as dozens of other up-and-coming companies, there are some very smart investments to be made in the very near future.

Disclosure: I do not own any of the stocks mentioned in this article.

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