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XLV's Best and Worst Performers in the Last Week of August

PART:
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Part 7
XLV's Best and Worst Performers in the Last Week of August PART 7 OF 7

Patterson Enjoys Consistent Revenue Growth

Insight into Patterson Companies

Patterson Companies (PDCO) makes up 0.14% of the Health Care Select Sector SPDR ETF (XLV). PDCO has a market cap of ~$4.7 billion. The company operates in several countries and has a good flow of revenue. In this article, we will analyze the revenue trend of PDCO for the past few years.

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The above graph reflects the revenue trend of PDCO since 2010. The company’s revenue has been growing consistently every year. In 2014, the company’s revenue was $4.1 billion as compared to $3.63 billion in 2013. Revenue jumped by ~12% on a year-over-year basis. The growth was mainly attributable to the acquisition of National Veterinary Services (NVS), which immediately contributed to the revenue growth of the company. This acquisition also helped PDCO expand its footprint into the UK veterinary market.

PDCO’s revenue drivers

PDCO’s revenue comes from three different streams. In 2014, Patterson Dental contributed 58%, Patterson Veterinary contributed 30%, and Patterson Medical contributed 12%.

  1. Patterson Dental: The Patterson Dental division contributed a revenue of $2.4 billion, which is ~58% of the total revenue. On a year-over-year basis, the sales remained flat, but the contribution share to the overall revenue decreased from 65% in 2013 to 58% in 2014.
  2. Patterson Veterinary: This division contributed a revenue of $1.2 billion, representing ~30% of the overall revenue as compared to $755 million for 2013. On a year-over-year basis, sales rose by ~59%. For 2013, this division contributed 21% of the overall revenue, but for 2014 it was up by 9% to 30%.
  3. Patterson Medical: The revenue from the Patterson Medical division was at $479 million for 2014 as compared to $502 million for 2013. The share of this division to the overall revenue has come down to 12% in 2014 from 14% in 2013.

The Patterson Veterinary division has outperformed other divisions in terms of growth, but it remains to be seen how things will shape up for the company in 2015.

For the period between August 25 and August 31, 2015, PDCO was down by 4.1% and some of its peers according to market cap like Dentsply International (XRAY), PerkinElmer (PKI), and Tenet Healthcare (THC) outperformed PDCO with returns of 1.67%, 5.94%, and 4.97%, respectively.

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