3/8/25
Dentsply Sirona, a key player in the dental equipment and technology space, has been a go-to provider for dental professionals worldwide. The company specializes in everything from imaging systems to dental implants, offering solutions that keep modern dentistry moving forward. But while its products remain essential, the company itself has faced a rough patch.
The stock has taken a significant hit over the past year, and revenue declines have weighed heavily on its valuation. Despite this, the dividend yield has risen to nearly 4%, making it an intriguing option for income-focused investors. The big question is whether this yield is a sign of long-term opportunity or a warning signal for trouble ahead.
Let’s break it all down, starting with the key numbers.
Key Dividend Metrics
📌 Dividend Yield: 3.94%
📌 Annual Dividend Rate: $0.64
📌 Payout Ratio: 28.83%
📌 5-Year Average Dividend Yield: 1.41%
📌 Dividend Growth: Limited in recent years
📌 Ex-Dividend Date: March 28, 2025
📌 Next Payment Date: April 11, 2025
Dividend Overview
For investors focused on income, the nearly 4% yield on Dentsply Sirona stock might look appealing. However, it’s important to recognize that this high yield isn’t due to aggressive dividend growth—it’s the result of a sharp drop in share price.
Over the past five years, the stock’s dividend yield has historically been much lower, averaging around 1.41%. The payout itself remains steady at $0.64 per year, and the company isn’t overextending itself to maintain it, with a reasonable payout ratio of just under 29%. That’s a positive sign in isolation, but when a company is losing money and struggling to grow revenue, it’s fair to ask how long dividends can stay untouched.
For those looking to capture the next dividend payment, the key date to keep in mind is March 28, 2025. That’s the last day to own shares before the ex-dividend date to qualify for the April 11 payout.
Dividend Growth and Safety
Dentsply Sirona isn’t a stock that’s been making a habit of raising its dividend. While some dividend-paying companies prioritize growth and consistency, this one has kept payouts flat. Investors looking for increasing income streams won’t find much to get excited about here.
The good news is that the dividend isn’t immediately in danger of a cut. The payout ratio remains low, meaning the company isn’t stretching itself thin to keep paying shareholders. However, the bigger concern is profitability. Over the past year, Dentsply Sirona has reported a net loss of $910 million, with a negative profit margin of nearly 24%. That’s not the kind of backdrop that screams long-term dividend stability.
If revenue continues to decline and losses persist, there’s always a risk that management could take a hard look at the dividend and decide it’s time for a change. That hasn’t happened yet, but it’s a factor that income investors should keep in mind.
Chart Analysis
The stock chart for Dentsply Sirona (XRAY) shows a prolonged downtrend with no clear signs of reversal just yet. Both moving averages are sloping downward, indicating that the stock remains under selling pressure. The Relative Strength Index (RSI) and volume trends provide further insight into the stock’s current phase and potential next moves.
Long-Term Trend and Moving Averages
The 50-day moving average (light blue) has remained below the 200-day moving average (dark blue) for quite some time, reinforcing a bearish outlook. The price has consistently traded below both moving averages, a sign that sellers have maintained control. Every time the stock attempts to move toward these levels, it faces rejection, suggesting a lack of strong buying interest.
A notable drop occurred in November, creating a gap down, and the stock never recovered back to previous levels. Since then, it has struggled to maintain any meaningful upward momentum. The continued decline in the 200-day moving average confirms that long-term sentiment remains weak.
Volume and Selling Pressure
Looking at the volume, a few spikes stand out—particularly in April and November. These larger volume bars suggest moments of heavy institutional trading, likely involving major sell-offs. After the sharp decline in November, volume remained relatively low, which indicates that buyers have not stepped in aggressively to support the stock.
The most recent trading days show moderate volume levels, meaning there is no rush of buyers stepping in to reverse the downtrend. Without stronger accumulation, the stock may continue to drift lower or trade sideways until sentiment improves.
RSI and Momentum
The Relative Strength Index (RSI) has been hovering in the lower range, frequently dipping near oversold territory. This suggests the stock has been under consistent selling pressure with only minor relief rallies.
Recently, the RSI has shown a slight uptick, which could mean some short-term buying interest is returning. However, without a stronger push above the midline (50 level), it’s not enough to confirm a trend reversal. Instead, it reflects a temporary pause in the downtrend rather than a full shift in momentum.
Recent Price Action
The latest few candles show a slight recovery from the recent lows, but there is still resistance ahead. The stock tested the $16 range and managed to close slightly higher, which could indicate a small level of support. However, the absence of a significant increase in volume suggests that this move lacks strong conviction.
Wick patterns in recent candles show some buying interest at lower levels, but sellers are still stepping in to cap any upside moves. If this pattern continues, the stock could remain in a consolidation phase rather than making a decisive move upward.
Analyst Ratings
Dentsply Sirona (NASDAQ: XRAY) has seen a mix of upgrades and downgrades recently, reflecting both optimism and caution from analysts. While some believe the stock has upside potential, others remain skeptical about its near-term performance.
📈 Upgrades
📌 William Blair – Upgraded from Market Perform to Outperform (November 10, 2024)
This upgrade signals growing confidence in the company’s long-term strategy. Analysts may see potential for operational improvements, cost-cutting measures, or stronger-than-expected demand in the dental market. The change suggests that William Blair believes the stock could outperform broader market expectations in the coming quarters.
📉 Downgrades
📌 Evercore ISI – Downgraded from Outperform to In Line (January 7, 2025) – Price Target: $20
Evercore ISI analysts took a more neutral stance on the stock, indicating that while Dentsply Sirona may still have strengths, there are no clear near-term catalysts to drive significant growth.
📌 Jefferies – Downgraded from Buy to Hold (January 23, 2025) – Price Target Adjusted: $30 → $20
Jefferies reduced its rating, citing concerns over the company’s valuation and ongoing challenges in revenue growth. The firm believes that the previous price target was too optimistic given current market conditions.
📌 Wells Fargo – Initiated Coverage with Equal Weight Rating (February 14, 2025) – Price Target: $20
Wells Fargo took a neutral stance on the stock, suggesting that while Dentsply Sirona has potential, it may not outperform its industry peers in the short term.
📌 Barrington Research – Revised Price Target from $24 to $20 (February 28, 2025) – Maintained Outperform Rating
Despite lowering its price target, Barrington Research still sees upside potential for the stock. The firm believes that long-term improvements in efficiency and cost management could drive better performance over time.
🎯 Consensus Price Target
The average analyst price target for Dentsply Sirona over the next twelve months is $23.58, representing a potential upside of approximately 43.84% from the current price of $16.40.
🔹 Highest Price Target: $32.00
🔹 Lowest Price Target: $19.00
The range of analyst opinions reflects uncertainty around the stock, with some expecting a strong recovery while others remain cautious about near-term risks.
Earnings Report Summary
Dentsply Sirona just wrapped up its latest earnings report, and the results were a bit of a mixed bag. The company, which makes dental equipment and technology, saw sales slide over the past year, but it managed to keep its earnings within expectations.
Full-Year 2024 Performance
For the full year, the company brought in $3.79 billion in revenue, but that was down 4.3 percent from the previous year. Organic sales also dipped 3.5 percent, and a chunk of that decline came from Byte, its clear aligner business. This suggests that demand for some of its products may be softening, or that competition is putting pressure on growth.
Earnings came in at $1.84 per share, which landed within the company’s guidance range of $1.80 to $2.00. While it’s good to see that they hit their targets, the downward trend in both revenue and profits isn’t ideal. It means the company had to work harder to manage costs and keep things steady while sales declined.
Fourth Quarter 2024 Highlights
The last quarter of the year wasn’t much better. Sales dropped 7.9 percent to $905 million, and organic sales fell 6.7 percent. That’s a pretty clear sign that business slowed down toward the end of the year.
Earnings per share for the quarter came in at $0.26, down from $0.44 in the same quarter last year. That’s a noticeable drop, which suggests that either costs increased, pricing power weakened, or both.
Segment Breakdown
Dentsply Sirona’s business is divided into two key areas:
- Technologies and Equipment: This segment saw sales drop 4.3 percent to $2.22 billion. The biggest declines came from imaging equipment and CAD/CAM systems, but there was some growth in aligners.
- Consumables: Sales here fell 4.5 percent to $1.58 billion. Fewer sales in restorative and preventive products contributed to the decline, likely due to a combination of market trends and competitive pricing.
Looking Ahead to 2025
The company isn’t expecting a major turnaround just yet. For 2025, they’re forecasting revenue between $3.5 billion and $3.6 billion, which suggests another year of cautious expectations. Earnings per share are projected to land between $1.80 and $2.00, meaning they’re aiming to keep profits stable despite the sales challenges.
Overall, Dentsply Sirona is navigating a tough period, with declining sales and shrinking earnings. While they’re managing costs well enough to stay within their own projections, the bigger question is whether they can reverse the downtrend and find new areas for growth.
Financial Health and Stability
Taking a deeper look at the financials, the numbers don’t paint the rosiest picture.
- Revenue over the last year came in at $3.79 billion, but it’s down more than 10% from the previous year.
- Net income was deep in the red, with a reported loss of $910 million.
- The company carries $2.3 billion in debt, with a debt-to-equity ratio of 118%.
- Cash on hand is just over $300 million—not a terrible figure, but not enough to significantly offset debt concerns.
On the positive side, cash flow remains healthy for now. Operating cash flow over the last 12 months totaled $461 million, while levered free cash flow came in at $400 million. That means the business is still generating cash despite its profitability struggles, which is a key factor in keeping the dividend payments going.
However, high debt levels combined with declining revenue could put pressure on those cash flows over time. If debt obligations become more expensive to manage or if revenue takes another hit, it could impact the company’s ability to sustain its dividend without making changes elsewhere.
Valuation and Stock Performance
Dentsply Sirona’s stock has been on a downward slide, losing more than half its value from its 52-week high of $34.28 to its current price in the mid-$16 range.
Where it stands on valuation metrics:
- Forward price-to-earnings (P/E) ratio is sitting at 8.81, suggesting a low valuation.
- Price-to-sales ratio is just 0.87, meaning the stock is trading below 1x revenue.
- Price-to-book ratio is 1.67, which is within a reasonable range.
From a valuation standpoint, the stock looks cheap. The low P/E and price-to-sales ratios suggest that the market has already priced in a lot of the company’s challenges. However, for those looking for a sign of a turnaround, it’s not clear when or if one is coming.
Momentum is still weak, with the stock trading well below both its 50-day and 200-day moving averages. That means there’s no immediate technical signal that the stock is ready to rebound just yet.
Risks and Considerations
For dividend investors, the main risk is whether the company can stabilize its business and return to consistent profitability. Here are some key areas to watch:
🚨 Earnings Losses: The company posted a net loss of $910 million, which isn’t sustainable over the long run.
🚨 Revenue Declines: A 10.6% year-over-year drop raises concerns about whether the business is shrinking.
🚨 High Debt Load: Carrying $2.3 billion in debt with a debt-to-equity ratio above 100% adds financial risk.
🚨 Stock Weakness: Down more than 50% from its peak, the stock has been a tough hold for investors.
🚨 Institutional Selling: Over 100% institutional ownership suggests that large funds could be moving in and out of the stock quickly.
While none of these are immediate dealbreakers, they all contribute to uncertainty. Investors comfortable with some risk might see an opportunity at current levels, but those prioritizing safety and stability might prefer to wait for clearer signs of improvement.
Final Thoughts
Dentsply Sirona presents an interesting case for dividend investors. On the surface, a nearly 4% yield looks attractive, and the payout ratio suggests that the company isn’t overextending itself. However, with negative earnings, shrinking revenue, and a sizable debt load, there are real concerns about the long-term outlook.
At current levels, the stock trades cheaply compared to historical valuation measures. If the business can turn things around, it could represent a compelling opportunity for value-seeking dividend investors. But for those looking for a track record of stability, consistent dividend growth, and strong financials, there are better options in the market.
As with any stock, the best approach is to weigh the risks and rewards carefully. Dentsply Sirona has potential, but it also has challenges to overcome before it can be considered a truly reliable income investment.
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