Open wide and it won’t hurt as much: dental stocks and how they’re looking
Health & Biotech
Health & Biotech
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Dental work is a little like a rising stock: you can put off buying it, but it’ll only get more expensive the longer you wait.
But in the case of going to the dentist, it’ll also be more painful.
Stockhead monitors four toothy stocks on the ASX which will fix your teeth and claim to brighten your share portfolio.
There’s SDI (ASX:SDI) – it makes things like dental cement and tooth whitening kits.
Smiles Inclusive (ASX:SIL) is a dental chain which listed last year and has been going through some trauma lately, as the former CEO and chairman try to spill the board.
And 1300 Smiles (ASX:ONT) and Pacific Smiles (ASX:PSQ) are also dental chains.
Unfortunately, the latter three have all largely seen their share prices tank in the last six to 12 months.
1300 Smiles listed in 2005 and after a solid share price run, began to level out around 2013.
Since then, it has consistently made full year profits between $5m and $7.6m while throwing off a steadily rising dividend.
Last year it was 12c a share.
It’s proved dentistry isn’t exciting, but it does provide a solid income stream as it slowly acquires new practices on the eastern seaboard. Just don’t ask it to take more revenue: it’s been in the $30s million for the last seven years.
The biggest of the four, Pacific Smiles, is also not obscenely profitable but hasn’t missed turning in a year yet since listing in 2014.
It damaged itself last year when full year profit slipped to $6.6m, but still ponied up with an ever increasing dividend of 3.8c.
It’s not the most liquid of stocks; 82 per cent of the register is locked up by the top 20 holders and 52 per cent is held by just three shareholders.
Smiles Inclusive started a run of bad news late last year when a legal dispute with a business it bought during the IPO flared up.
Then it turned full year profit guidance into a loss and that aforementioned boardroom fight erupted, as did a mention that it was working on not breaching any more loan conditions.
Almost all of the damage was done in November with an initial financial downgrade, so while the share price is indeed down 81 per cent in the last six months, since December when it levelled off it’s only now down by 40 per cent.
The only company in the black on the ASX is SDI, proving that sometimes it’s better to sell the picks and shovels to the miners, than be the miner.
SDI has been around since 1985.
Profits hit a nadir around the 2011 fiscal year and were steadily rising until peaking in 2016 and dropping to $5.6m and $5.7m in the two years after.
The company wanted investors to know in the recent half year report that it may have stemmed this: more people started buying its aesthetic products in all markets around the world except Brazil, where locals were undercutting them on price and the government wasn’t so keen to hand them tender wins.