As someone suggested – links are good for SEO, directories are good for Local SEO. Do both & you win. Likely, with a bit of info SEO you can get yourself more relecant TOF traffic & get links as well.

The Miami dentists example you gave – It seems like you’re overlooking an important factor – namely, user intent and CTR. Regardless of how many links you build, how great your content is and so on, if Google sees that the majority of users want to see a list of dentists in Miami when they search for that (and not a single dentist website), you probably won’t rank in the top consistently.

Now, ranking for something like “best dentist in miami” or “cheap dentist in miami” or a more specific long tail could actually bring you success because:

a) even if users want to see listings, there probably isn’t a ton of statistically significant data Google can use (based on search volume, it’s probably the case for many local places) so it will fall back to other ranking factors.

&

b) the competition will naturally be lower (a directory ranking for “miami dentist” & “cheap miami dentist” with 2 different pages is in slightly dangerous waters in terms of cannibalization & duplicate content).

In all honesty, regardless of what any SEO tool says, I’m betting everything that this is a much much more competitive keyword where the SERP requires more analysis and reasoning to determing why it looks as it does than just “links”.