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PDCO

Patterson Companies NasdaqGS:PDCO Stock Report

Last Price

US$25.28

Market Cap

US$2.4b

7D

-3.3%

1Y

-16.9%

Updated

24 Sep, 2022

Data

Company Financials +

Patterson Companies Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Patterson Companies
Historical stock prices
Current Share PriceUS$25.28
52 Week HighUS$35.29
52 Week LowUS$24.94
Beta1.25
1 Month Change-13.93%
3 Month Change-11.21%
1 Year Change-16.92%
3 Year Change42.50%
5 Year Change-34.59%
Change since IPO1,181.80%

Recent News & Updates

Sep 22

Patterson Companies: Looking Past The Earnings Disappointment

Summary Patterson’s Q1 2023 earnings report disappointed amid weakness in the dental business. The reiterated guidance indicates continued resilience in animal health, though, with dental also benefiting from several post-Q1 tailwinds. With the stock trading cheaply relative to peers and offering a solid yield, the risk/reward is attractive at current levels. Dental and animal health product distributor Patterson Companies (PDCO) fell short of Street expectations in its most recent quarter amid weakness across dental consumables and equipment, outweighing resilience in the animal health business. The revenue miss and a hotter-than-expected opex led to a weaker operating margin result as well, sending the stock lower post-quarter. While the pessimism is warranted, I would look past the Q1 2023 weakness given the attractive exposure to secular growth trends, as well as the track record of beats-and-raises PDCO management has built over the years. To be clear, there remain risks - the current guidance implies a steeper EPS ramp in the back half of the year, and the macro environment is as challenging as ever. Still, management's confidence in its ability to hit the reaffirmed FY23 guidance numbers, as well as its strong execution track record, are key positives. Relative to the unchanged EPS estimates, PDCO stock trades at a discounted ~11x fwd P/E (vs. peers) and offers an attractive ~4% dividend yield to patient investors. YCharts Puts and Takes from the Underwhelming Headline Numbers PDCO kicked off the first quarter of its 2023 fiscal year with disappointing numbers across the board - non-GAAP EPS at $0.32 fell ~25% YoY, while sales of $1.5bn were down ~6% YoY on a reported basis. Some context is needed, though, given the YoY comparison is skewed by an extra selling week (~7% negative impact on revenue growth). On a normalized basis (i.e., accounting for the extra week), revenue would have been up a resilient ~3% YoY despite additional headwinds from a stronger dollar. Patterson Companies PDCO’s gross margin at 20.5% (+330bps YoY) was the only bright spot this quarter, benefiting from product mix shifts within PDCO’s key segments (i.e., dental and animal health) and recent freight surcharge actions. The combination of lower revenue and higher operating expenses (mainly from the dental business) weighed on the rest of the P&L, though, as operating margins were down YoY. To a lesser degree, margins were also impacted by expense timing, as PDCO’s national sales conferences for the dental and animal health businesses occurred earlier than expected in the first quarter of this year. The $0.02-0.03/share impact for this period should reverse throughout the year, though, providing a small earnings tailwind to earnings in the coming quarters. Dental Equipment Lags; Resilient Animal Health Leads Dental equipment sales were the key laggard this time around, in stark contrast to last quarter’s impressive double-digit % gains, as industry-wide headwinds in COVID/PPE products weighed. There were silver linings, though – while total dental consumables sales fell 2.7%, sales would have grown 1.9% (a ~100bps Q/Q deceleration) adjusted for infection prevention products. Core equipment results were also up in the solid double-digits % YoY amid normalizing supply chain progress, but the declines in digital equipment and computer-aided design/manufacturing are concerning coming off the prior quarter’s strength. Patterson Companies Animal health results were fairly resilient, led by strong livestock growth of ~8%. While this was below the double-digit % growth last quarter, the segment still outpaced the broader market and, more surprisingly, the mid-single-digit % companion animal growth. Given the companion animal sub-segment has historically shown stronger growth potential, the current performance could signal a slowdown in the pet market and/or PDCO-specific outperformance on the production animal side of things. Bears will point to the modestly lower vet traffic trend as a reason for caution, but management commentary supported the sustainability of the Q1 resilience, as vet clinics remain at capacity and per-visit spending is also on the rise. Patterson Companies Guidance Surprisingly Intact Despite the Q1 Miss Somewhat surprisingly, PDCO maintained its full-year expectations despite the first quarter setback. Management’s rationale is twofold – for one, the company has seen share gains in its animal health and dental equipment businesses, and perhaps more importantly, management sees equipment demand staying robust through the rest of the fiscal year. I suspect the latter point could be valid given the healthy basic equipment backlog, helping to offset any deceleration in companion animal spending in the coming quarters.

Sep 13

Patterson declares $0.26 dividend

Patterson (NASDAQ:PDCO) declares $0.26/share quarterly dividend, in line with previous. Forward yield 3.94% Payable Nov. 4; for shareholders of record Oct. 21; ex-div Oct. 20. See PDCO Dividend Scorecard, Yield Chart, & Dividend Growth.

Sep 01
At US$27.89, Is Patterson Companies, Inc. (NASDAQ:PDCO) Worth Looking At Closely?

At US$27.89, Is Patterson Companies, Inc. (NASDAQ:PDCO) Worth Looking At Closely?

While Patterson Companies, Inc. ( NASDAQ:PDCO ) might not be the most widely known stock at the moment, it received a...

Aug 31

Patterson FQ1 2023 Earnings Preview

Patterson (NASDAQ:PDCO) is scheduled to announce FQ1 earnings results on Thursday, September 1st, before market open. The consensus EPS Estimate is $0.38 (-12.25% Y/Y) and the consensus Revenue Estimate is $1.55B (-4.04% Y/Y). Over the last 2 years, PDCO has beaten EPS and revenue estimates 88% of the time. Over the last 3 months, EPS estimates have seen 0 upward revision and 10 downward revisions. Revenue estimates have seen 2 upward revisions and 6 downward revisions.

Shareholder Returns

PDCOUS HealthcareUS Market
7D-3.3%-3.4%-5.2%
1Y-16.9%6.3%-23.0%

Return vs Industry: PDCO underperformed the US Healthcare industry which returned 6.1% over the past year.

Return vs Market: PDCO exceeded the US Market which returned -23.1% over the past year.

Price Volatility

Is PDCO's price volatile compared to industry and market?
PDCO volatility
PDCO Average Weekly Movement4.9%
Healthcare Industry Average Movement8.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: PDCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: PDCO's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
18777,700Mark Walchirkhttps://www.pattersoncompanies.com

Patterson Companies, Inc. engages in distribution of dental and animal health products in the United States, the United Kingdom, and Canada. The company operates through three segments: Dental, Animal Health, and Corporate segments. The Dental segment offers consumable products, including infection control, restorative materials, and instruments; basic and advanced technology and dental equipment; practice optimization solutions, such as practice management software, e-commerce, revenue cycle management, patient engagement solutions, and clinical and patient education systems.

Patterson Companies Fundamentals Summary

How do Patterson Companies's earnings and revenue compare to its market cap?
PDCO fundamental statistics
Market CapUS$2.45b
Earnings (TTM)US$193.80m
Revenue (TTM)US$6.41b

12.6x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PDCO income statement (TTM)
RevenueUS$6.41b
Cost of RevenueUS$5.08b
Gross ProfitUS$1.32b
Other ExpensesUS$1.13b
EarningsUS$193.80m

Last Reported Earnings

Jul 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.00
Gross Margin20.65%
Net Profit Margin3.02%
Debt/Equity Ratio62.5%

How did PDCO perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

52%

Payout Ratio

Does PDCO pay a reliable dividends?

See PDCO dividend history and benchmarks
When do you need to buy PDCO by to receive an upcoming dividend?
Patterson Companies dividend dates
Ex Dividend DateOct 20 2022
Dividend Pay DateNov 04 2022
Days until Ex dividend24 days
Days until Dividend pay date39 days

Does PDCO pay a reliable dividends?

See PDCO dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is PDCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PDCO?

Other financial metrics that can be useful for relative valuation.

PDCO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.5x
Enterprise Value/EBITDA9.5x
PEG Ratio1.7x

Price to Earnings Ratio vs Peers

How does PDCO's PE Ratio compare to its peers?

PDCO PE Ratio vs Peers
The above table shows the PE ratio for PDCO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average15.7x
OMI Owens & Minor
12.7x21.2%US$2.0b
AHCO AdaptHealth
20.7x23.7%US$2.6b
HSIC Henry Schein
14.1x6.3%US$9.2b
ABC AmerisourceBergen
15.4x8.3%US$28.4b
PDCO Patterson Companies
12.6x7.3%US$2.4b

Price-To-Earnings vs Peers: PDCO is good value based on its Price-To-Earnings Ratio (12.6x) compared to the peer average (15.7x).


Price to Earnings Ratio vs Industry

How does PDCO's PE Ratio compare vs other companies in the US Healthcare Industry?

Price-To-Earnings vs Industry: PDCO is good value based on its Price-To-Earnings Ratio (12.6x) compared to the US Healthcare industry average (18.4x)


Price to Earnings Ratio vs Fair Ratio

What is PDCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PDCO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.6x
Fair PE Ratio22.4x

Price-To-Earnings vs Fair Ratio: PDCO is good value based on its Price-To-Earnings Ratio (12.6x) compared to the estimated Fair Price-To-Earnings Ratio (22.4x).


Share Price vs Fair Value

What is the Fair Price of PDCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PDCO ($25.28) is trading below our estimate of fair value ($40.6)

Significantly Below Fair Value: PDCO is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Patterson Companies forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


7.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PDCO's forecast earnings growth (7.3% per year) is above the savings rate (1.9%).

Earnings vs Market: PDCO's earnings (7.3% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: PDCO's earnings are forecast to grow, but not significantly.

Revenue vs Market: PDCO's revenue (3.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PDCO's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PDCO's Return on Equity is forecast to be low in 3 years time (18.6%).


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Past Performance

How has Patterson Companies performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-14.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PDCO has a high level of non-cash earnings.

Growing Profit Margin: PDCO's current net profit margins (3%) are higher than last year (2.6%).


Past Earnings Growth Analysis

Earnings Trend: PDCO's earnings have declined by 14.4% per year over the past 5 years.

Accelerating Growth: PDCO's earnings growth over the past year (17.1%) exceeds its 5-year average (-14.4% per year).

Earnings vs Industry: PDCO earnings growth over the past year (17.1%) exceeded the Healthcare industry 3.2%.


Return on Equity

High ROE: PDCO's Return on Equity (18.7%) is considered low.


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Financial Health

How is Patterson Companies's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: PDCO's short term assets ($1.7B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: PDCO's short term assets ($1.7B) exceed its long term liabilities ($687.8M).


Debt to Equity History and Analysis

Debt Level: PDCO's net debt to equity ratio (47.6%) is considered high.

Reducing Debt: PDCO's debt to equity ratio has reduced from 84.9% to 62.5% over the past 5 years.

Debt Coverage: PDCO's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: PDCO earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Patterson Companies's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.11%

Current Dividend Yield

Upcoming Dividend Payment

TodaySep 25 2022Ex Dividend DateOct 20 2022Dividend Pay DateNov 04 202215 days from Ex DividendBuy in the next 24 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: PDCO's dividend (4.11%) is higher than the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: PDCO's dividend (4.11%) is low compared to the top 25% of dividend payers in the US market (4.57%).


Stability and Growth of Payments

Stable Dividend: PDCO's dividends per share have been stable in the past 10 years.

Growing Dividend: PDCO's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (52.2%), PDCO's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: PDCO is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Mark Walchirk (56 yo)

4.83yrs

Tenure

US$7,142,343

Compensation

Mr. Mark S. Walchirk has been the Chief Executive Officer and President of Patterson Companies, Inc. since November 20, 2017. Mr. Walchirk served as the President of U.S. Pharmaceutical at McKesson Corpora...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD7.14M) is about average for companies of similar size in the US market ($USD6.95M).

Compensation vs Earnings: Mark's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: PDCO's management team is considered experienced (4.6 years average tenure).


Board Members

Experienced Board: PDCO's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 70.19% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
10.64%
BlackRock, Inc.
10,311,967$260.7m-0.68%0.01%
9.95%
Patterson Companies, ESOP
9,640,763$243.7m-0.38%no data
9.24%
The Vanguard Group, Inc.
8,951,741$226.3m1.98%0.01%
6.86%
T. Rowe Price Group, Inc.
6,646,160$168.0m-38.03%0.02%
4.11%
Dimensional Fund Advisors LP
3,980,367$100.6m-0.4%0.02%
3.17%
American Century Investment Management Inc
3,073,086$77.7m-4.94%0.06%
2.87%
State Street Global Advisors, Inc.
2,784,408$70.4m-1.61%no data
1.88%
Westwood Management Corp.
1,819,825$46.0m26.25%0.52%
1.85%
River Road Asset Management, LLC
1,796,855$45.4m-3.94%0.64%
1.72%
Citadel Advisors LLC
1,663,960$42.1m155.71%0.06%
1.62%
Geode Capital Management, LLC
1,567,653$39.6m-0.33%0.01%
1.57%
Victory Capital Management Inc.
1,524,133$38.5m6.36%0.04%
1.57%
Northern Trust Global Investments
1,523,576$38.5m-1.19%0.01%
1.54%
BNY Mellon Asset Management
1,495,133$37.8m-2.48%0.01%
1.49%
Allspring Global Investments, LLC
1,445,125$36.5m-18.4%0.06%
1.42%
Millennium Management LLC
1,373,607$34.7m42.12%0.05%
1.26%
Eaton Vance Management
1,218,732$30.8m0.39%0.01%
1.21%
Brown Advisory Incorporated
1,168,740$29.5m-2.87%0.05%
1.02%
Managed Account Advisors LLC
990,643$25.0m8.02%0.01%
1.01%
Sasco Capital, Inc.
975,504$24.7m-0.43%3.47%
0.98%
GAMCO Investors, Inc.
948,289$24.0m-4.77%0.1%
0.86%
Ceredex Value Advisors LLC
832,971$21.1m-21.51%0.32%
0.8%
Charles Schwab Investment Management, Inc.
770,909$19.5m2.77%0.01%
0.79%
Morgan Stanley, Investment Banking and Brokerage Investments
762,772$19.3m61.94%no data
0.77%
Teachers Insurance and Annuity Association-College Retirement Equities Fund
744,234$18.8m-0.93%0.01%

Company Information

Patterson Companies, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Patterson Companies, Inc.
  • Ticker: PDCO
  • Exchange: NasdaqGS
  • Founded: 1877
  • Industry: Health Care Distributors
  • Sector: Healthcare
  • Implied Market Cap: US$2.450b
  • Shares outstanding: 96.90m
  • Website: https://www.pattersoncompanies.com

Number of Employees


Location

  • Patterson Companies, Inc.
  • 1031 Mendota Heights Road
  • Saint Paul
  • Minnesota
  • 55120
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PDCONasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1992
PD2XTRA (XETRA Trading Platform)YesCommon StockDEEUROct 1992
PD2DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1992
0KGBLSE (London Stock Exchange)YesCommon StockGBUSDOct 1992

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/07/30
Annual Earnings2022/04/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.