CNBC’s Mad Money investor Jim Cramer has identified what he calls an unheralded bull market in the US economy: the rise of dental stocks. In his spot highlighting the progress of these dental stocks, he does a good job of tackling the underlying factors driving demand for dentistry, and recognizing that part of the reason why these stocks are doing well is that the companies are offering superior
Different Parts of the Food Chain
Cramer is focused on three different stocks for this Mad Money segment: Align Technology, Henry Schein, and Dentsply Sirona.
In his analysis, Cramer points out that the three different stocks he’s focusing on are in different parts of the dental market–sort of. Henry Schein is one of the largest suppliers of dental equipment, offering basically all the standard dental equipment that your average general dentist needs to keep offering care. This includes both tools and consumables. Align Technology is the maker of Invisalign and related technologies such as the digital scanner iTero. Dentsply Sirona is a beast, offering orthodontics, dental supplies, digital scanners, and the leading CAD/CAM system in the world: CEREC. It basically offers everything the other two companies offer–and then some.
Although there is overlap in these companies, Cramer’s right in highlighting that these three companies supply a broad swath of the dental market. And as the dental market goes, so do they.
Driving Trends of Dentistry
And these three stocks are growing because dentistry is growing. This year, dental spending is set to rise by 5%, up from 3.7% last year. What do you call it when the growth rate is growing? That’s exponential growth–and a great investment opportunity.
So what is behind the current upswing in dentistry? Cramer identifies three key trends.
First, an aging population. There’s no secret that we’re all getting older, and that older people need more dental care. That’s built-in growing demand for the foreseeable future.
Second, Cramer focused on the rise of selfie culture that leads more younger adults to want to get cosmetic dentistry, including teeth whitening, orthodontics, and restorative dentistry. People may have thought that social media was a fad, but over the last decade it’s become a solidly entrenched part of our culture, and there’s no reason to believe that it’s going anywhere.
Finally, the growth of markets overseas is a huge potential for these companies. As people around the world see improved standard of living, they’re going to have a higher standard for oral health and beauty. And that’s part of what’s driving the growth of these companies. Plus, these companies have huge benefits built in. Invisalign is a constantly improving product, recently announcing a 50% decrease in treatment time and the addition of jaw advancement. Henry Schein supplies about 90% of dentists in the US. And Dentsply Sirona is a mega merger whose diverse portfolio gives it the ability to respond to many different dental trends.
Invest in Your Own Dental Care, Too
If you’re rushing out to buy some of these dental stocks, you should also consider investing in your own dental health. There are many reasons why dental care is one of your best investments.
First, preventive and restorative dental care can reduce your healthcare spending for things like heart disease, stroke, diabetes, and more.
And improving your dental health and beauty can open doors that you thought were closed in your professional and personal life.