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5-Star Price
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Economic Moat
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Capital Allocation
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Previously a safe haven of essential services in 2020, narrow-moat Fresenius Medical Care released detailed 2021 guidance for a profit decline in the high teens to the mid-20s in 2021 (versus up to a 25% decline highlighted in early February) on COVID-19-related challenges. We recently trimmed our fair value estimate on those concerns, and we do not anticipate changing it materially after this more detailed announcement.
Fresenius Medical Care is the largest dialysis company in the world, treating about 345,000 patients in roughly 4,000 clinics across the globe as of December 2019. In addition to providing dialysis services, the firm is a leading supplier of dialysis products, including machines, dialyzers, and concentrates. Fresenius accounts for about 35% of the global dialysis products market and benefits from being the world's only fully integrated dialysis business. Services account for roughly 80% of firmwide revenue, including care coordination and ancillary operations, while products account for the other roughly 20%. Products typically enjoy a higher margin, making them a strong contributor to the bottom line.
