Stock Analysis & Valuation Henry Schein, Inc. (HS2.DE)

• Previous Close: €74.06
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	9.90	-87
Graham Formula	28.50	-62

Strategic Investment Analysis

Company Overview

Henry Schein, Inc. (HS2.DE) is a leading global provider of healthcare products and services, specializing in dental, medical, and veterinary office-based practitioners. Headquartered in Melville, New York, the company operates through two key segments: healthcare distribution and technology/value-added services. The healthcare distribution segment supplies consumable products, equipment, pharmaceuticals, and surgical supplies, while the technology segment offers practice management software and digital solutions for healthcare providers. With a workforce of 18,000 employees, Henry Schein serves dental and medical practitioners, laboratories, and institutional clinics worldwide. The company’s diversified portfolio and strong distribution network position it as a critical player in the medical equipment and services sector. Trading on the Deutsche Börse (XETRA), Henry Schein combines extensive product offerings with technological innovation, making it a key enabler of efficient healthcare delivery.

Investment Summary

Henry Schein presents a stable investment opportunity within the healthcare distribution and technology sector, supported by its diversified revenue streams and global footprint. The company’s €12.67 billion revenue and €390 million net income in the latest fiscal year reflect steady operational performance. With a market cap of €9.38 billion and a beta of 0.87, Henry Schein exhibits lower volatility compared to broader markets, appealing to risk-averse investors. However, the lack of dividends may deter income-focused shareholders. The company’s strong operating cash flow (€848 million) and manageable debt levels (€2.87 billion) suggest financial resilience. Key risks include competitive pressures in healthcare distribution and potential margin compression from rising supply chain costs. Investors should monitor the growth of its technology segment, which could drive higher-margin recurring revenue.

Competitive Analysis

Henry Schein holds a competitive advantage through its integrated distribution and technology platform, serving dental and medical practitioners with a one-stop-shop solution. Its extensive product catalog and value-added services, such as practice management software, create high switching costs for customers. The company’s global supply chain and relationships with manufacturers ensure reliable product availability, a critical factor for healthcare providers. However, Henry Schein faces intense competition from larger healthcare distributors like McKesson and Cardinal Health, which benefit from greater scale in pharmaceutical distribution. In the dental segment, competitors like Patterson Companies and Envista Holdings offer similar product portfolios, though Henry Schein’s technology solutions (e.g., Dentrix) provide differentiation. The company’s focus on veterinary supplies also positions it against niche players like Covetrus. While Henry Schein’s dual-segment approach mitigates reliance on pure distribution, its technology segment must continuously innovate to stay ahead of emerging SaaS competitors in healthcare IT.

Major Competitors

• McKesson Corporation (MCK): McKesson is a global leader in pharmaceutical distribution, with a broader reach than Henry Schein in drug supply but less focus on dental and veterinary markets. Its scale provides cost advantages, but it lacks Henry Schein’s integrated technology offerings for small practices. McKesson’s stronger balance sheet allows for larger M&A activity.
• Cardinal Health, Inc. (CAH): Cardinal Health competes with Henry Schein in medical supply distribution but has a heavier emphasis on pharmaceuticals and hospital systems. Its larger revenue base gives it purchasing power, though it is less specialized in dental and veterinary segments. Cardinal’s recent struggles with generic drug pricing contrast with Henry Schein’s more stable dental consumables business.
• Patterson Companies, Inc. (PDCO): Patterson is a direct competitor in dental and animal health distribution, with a similar two-segment model (distribution + tech). However, its software solutions (e.g., Eaglesoft) are less dominant than Henry Schein’s Dentrix. Patterson’s smaller scale and recent financial underperformance make it a weaker rival in terms of growth and margins.
• Envista Holdings Corporation (NVST): Envista, spun off from Danaher, focuses on dental products and equipment, competing with Henry Schein’s high-margin capital goods sales. Its strong portfolio of dental imaging and orthodontic products gives it an edge in certain niches, but it lacks Henry Schein’s broad distribution network and consumables volume.
• Covetrus, Inc. (CVET): Covetrus specializes in veterinary supplies and technology, overlapping with Henry Schein’s animal health segment. Its cloud-based practice management software competes with Henry Schein’s offerings, but Covetrus has faced profitability challenges. Henry Schein’s diversified healthcare exposure provides more stability compared to Covetrus’s vet-only focus.