DENTSPLY (XRAY) Hits New 52-Week High on Q3 Strength
Shares of DENTSPLY International Inc. (XRAY) reached a new 52-week high of $52.69 in mid-day trading on Nov 17. The company’s shares closed nominally lower at $52.61 on the same day, translating into a decent one-year as well as a year-to-date return of roughly 9%.
DENTSPLY has a market cap of around $7.5 billion. Average volume of shares traded over the last three months stands at roughly 0.8 million.
Driving Factors
One of the leading manufacturers and distributors of dental and other consumable medical device products, DENTSPLY continues to execute on its overall growth strategy via margin expansion, better asset utilization and product innovation. Despite macroeconomic headwinds and a low growth healthcare environment, the company posted strong internal growth in third-quarter 2014.
DENTSPLY posted adjusted earnings of 62 cents per share in the third quarter, which beat the Zacks Consensus Estimate by a couple of cents. Earnings also increased 9% on a year-over-year basis led by considerable margin improvement.
Though year-over-year revenue growth was a modest 0.6%, the company’s business groups, particularly the consumable and infection control businesses, continue to gain market traction on the back of new product introductions.
Operating cash flow increased 17% year over year to $148 million in the third quarter and grew 42% to $368 million in the first nine months of 2014. Given the strong cash flow improvement, DENTSPLY has the flexibility to reinvest in growth initiatives, acquisitions and execute share repurchases.
For 2014, DENTSPLY now expects adjusted earnings in the range of $2.49 to $2.53 per share (prior outlook was $2.47 to $2.55). Currently, the Zacks Consensus Estimate is pegged at $2.52, which lies within the revised guided range.
Currently, DENTSPLY carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical/dental supply industry include AmerisourceBergen Corporation (ABC), Bio-Reference Laboratories Inc. (BRLI) and Steris Corp (STE). All three carry a Zacks Rank #2 (Buy).
Read the Full Research Report on ABC
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Read the Full Research Report on STE
Read the Full Research Report on BRLI
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