Dentsply International: Covering your dental supply needs

When you are in the dentist's chair it's sweepstakes odds you are not thinking about who makes the crowns, alloys, anesthetics and instruments all around you. When you need them, however, you are glad they are there and just might be interested in knowing that one of the world's biggest manufacturers of such products is headquartered in York, Pennsylvania.

Dentsply International (NASDAQ: XRAY) designs, develops, manufactures and markets a broad range of products for the dental market. The firm is a leading manufacturer of dental prosthetics, precious metal dental alloys, dental ceramics, dental sealants, and crown and bridge materials. It also provides such instruments as dental handpieces, endodontic devices, ultrasonic scalers and x-ray film holders; plus such consumables as injectable anesthetics, topical fluorides, impression materials, and dental implants. Dentsply distributes its products in over 120 countries.

The company pleased investors last week, when it reported Q1 EPS of 38 cents (ex-items) and revenues of $472.9 million. Analysts had been looking for 36 cents and $454.7 million. The CEO noted particular strength in the firm's specialty products and its European business units. Banc of America Securities and JMP Securities subsequently reiterated "buy" ratings on the issue.

The stock popped into a bullish "pennant" consolidation pattern on the news. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the shares with four "strong buys", four "buys" and one "hold". Analysts see a 15% average annual growth rate, through the next five years. The XRAY Price to Sales ratio (3.02), Price to Book ratio (4.18), EPS Growth rate (15.15%), Operating Margin (17.60%), Net Profit Margin (12.54%), Return on Assets (9.80%) and Return on Investment (12.57%) compare favorably with industry, sector and S&P 500 averages.

Institutions hold about 76% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $28.97 and $38.16. A stop-loss of $31.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.