u.s. equities

Henry Schein

company name

Henry Schein, Inc.

core business

Dental and medical products distributor

established

1932

headquarters

Melville, United States

esg consideration

Environmental, humanitarian, and diversity initiatives

Company Overview

The world’s largest distributor of health-care products and services to office-based dental and medical practitioners as well as alternate sites of care, Henry Schein operates in 31 countries and serves over one million dental and medical customers worldwide. The company also offers practice management software and other value-added solutions.

We believe Henry Schein’s culture and long history of embedding various social and environmental initiatives into its operation has allowed it to be a more dynamic organization and has helped the company establish a leadership position. Management’s focus on long-term value creation and deeper customer relationships positions the company well for the next stage of industry evolution, including more solutions-based selling. We felt that the market did not appreciate the company’s strengths in these areas, and we purchased a position in 2020.

31
countries of
operation

> 1 million
dental and medical customers worldwide

ESG Consideration

Stanley Bergman, Henry Schein’s current Chief Executive Officer (CEO), has been CEO for the past 32 years. Preceded only by Henry Schein himself and his son Jay, Stanley is only the third CEO in the company’s 89-year history.

Henry Schein has engaged in numerous ESG-related initiatives to address a variety of social and environmental issues, including:

Improving access to health care for underserved and at-risk populations globally through Henry Schein Cares

Advancing diversity and inclusion in the field of dentistry by co-founding and sponsoring the American Dental Association’s (ADA’s) Institute for Diversity in Leadership

Working with partners both upstream and downstream to ensure an ethical, inclusive, and carbon-neutral supply chain

Supporting a variety of employee resource groups, including Women’s Leadership Network, Black Legacy Professionals, Pride and Allies, and Latinx Group

A person with gloves on holding medical mask

In 2020, Henry Schein played a critical role in supplying personal protective equipment (PPE) to customers and the broader front-line community personnel. The company emptied its warehouses to hold stock for hospitals (which were not customers of Henry Schein), and as the company’s office-based practitioners started to reopen, Henry Schein absorbed the additional costs required to source PPE products.

Final thoughts

By donating to hospitals and absorbing inflated input costs to its office-based customers at a time of scarcity, Henry Schein demonstrated thoughtful inclusion of environmental and social good into the core of its strategy during the pandemic. This type of goodwill among customers and the community does not show up on its balance sheet, but it is a valuable asset for the company.

Sources: CEO Stanley Bergman at the ESG Fireside Chat, hosted by Morgan Stanley, on February 23, 2021, Burgundy research, Henry Schein filings

About the author

Doug Winslow, CFA

Vice President, Portfolio Manager

Doug stumbled upon value investing during the late 1990s tech boom. Benjamin Graham’s investment classics – Security Analysis and The Intelligent Investor – opened his eyes to a rational approach to investing and made an indelible impression on his views of the financial markets. Doug is currently responsible for Burgundy’s investments in U.S. large-cap equities. While the value philosophy is the foundation of his approach, he actively studies disruptive business theory to help understand the dynamic business environment in the U.S.