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Investors who want to put their money where their mouths are can do so literally with two stocks. Align Technology Inc. (NASDAQ: ALGN) is the leader in clear dental aligners and intraoral scanners used by dentists and orthodontists. Dentsply Sirona Inc. (NASDAQ: XRAY) is the largest global manufacturer of professional dental products, including medical instruments, dental implants, and orthodontic appliances.
Although Align and Dentsply Sirona serve the same industry, their stocks have gone in different directions so far this year. Align's share price has soared, while Dentsply Sirona stock has plunged. Which of these stocks is the better place for investors to put their money now?
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The case for Align Technology
We could talk about how Align's revenue continues to skyrocket, routinely setting new all-time highs. We could talk about the fantastic stock performance over the last few years. But the real argument for buying Align Technology stock is the underlying reason behind the revenue and share price increases.
The simple fact is that demand continues to grow rapidly for Align's Invisalign clear aligners and iTero intraoral scanners. And there are several reasons that's the case.
Orthodontic patients like that Invisalign aligners are practically invisible -- a nice change from traditional metal-and-wire braces. Dental professionals like how using the iTero scanners makes creating 3D images of patients' teeth a piece of cake. And those 3D images help streamline the process for patients to use Invisalign. That's a win-win for Align.
Another factor driving demand for Invisalign higher is that Align is reaching more patients across the world. The company recently opened its first Invisalign treatment planning facility in Germany, which boasts the highest population in the European Union. China and other nations with growing middle classes also present an enormous opportunity for Align.
Speaking of enormous opportunities, Invisalign aligners are currently suitable for only 8 million of the 12 million orthodontic cases each year. Align is working on ways for its clear aligners to close this gap -- and expand its addressable market significantly in the process.
Despite its impressive growth, Align still only has a market share of around 13% for its current addressable market (the 8 million annual orthodontic cases). And it only has a little more than 5% of the teen market. That means Align could keep its momentum going for a long time to come.
The case for Dentsply Sirona
Let's get one thing out of the way first: Dentsply Sirona doesn't have the growth story that Align does. However, there could be a kind of tortoise-versus-hare case to be made for Dentsply.