Head-To-Head Survey: NOW (DNOW) & DXP Enterprises (DXPE)

NOW (NYSE: DNOW) and DXP Enterprises (NASDAQ:DXPE) are both small-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Profitability

This table compares NOW and DXP Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NOW -7.14% -7.83% -5.63%
DXP Enterprises 1.58% 6.15% 2.41%

Analyst Ratings

This is a breakdown of recent ratings and price targets for NOW and DXP Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NOW 0 4 5 0 2.56
DXP Enterprises 0 2 2 0 2.50

NOW currently has a consensus price target of $19.33, suggesting a potential upside of 62.88%. DXP Enterprises has a consensus price target of $41.00, suggesting a potential upside of 60.66%. Given NOW’s stronger consensus rating and higher possible upside, equities analysts plainly believe NOW is more favorable than DXP Enterprises.

Valuation and Earnings

This table compares NOW and DXP Enterprises’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NOW $2.34 billion 0.55 -$81.00 million ($1.56) -7.61
DXP Enterprises $941.54 million 0.47 $59.70 million $0.84 30.38

DXP Enterprises has higher revenue, but lower earnings than NOW. NOW is trading at a lower price-to-earnings ratio than DXP Enterprises, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.8% of NOW shares are owned by institutional investors. Comparatively, 73.8% of DXP Enterprises shares are owned by institutional investors. 3.3% of NOW shares are owned by insiders. Comparatively, 11.3% of DXP Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

NOW has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 2.63, suggesting that its stock price is 163% more volatile than the S&P 500.

Summary

DXP Enterprises beats NOW on 7 of the 13 factors compared between the two stocks.

NOW Company Profile

NOW Inc. (NOW) is a global distributor to the oil and gas and industrial markets. The Company operates under the DistributionNOW and Wilson Export brands. Its segments include the United States, Canada and International. As of December 31, 2016, its segments, the United States, Canada and International, had over 200, 55 and 35 locations, respectively. The United States segment comprises United States Energy, United States Supply Chain and United States Process Solutions. NOW’s energy product offerings are used in the oil and gas industry, including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining, as well as in other industries, such as chemical processing, power generation and industrial manufacturing operations. It provides supply chain management to drilling contractors, exploration and production (E&P) operators, midstream operators, downstream energy and industrial manufacturing companies.

DXP Enterprises Company Profile

DXP Enterprises, Inc. (DXP) is engaged in the business of distributing maintenance, repair and operating (MRO) products, equipment and service to industrial customers. The Company operates through three segments: Service Centers, Supply Chain Services and Innovative Pumping Solutions. The Service Centers segment provides MRO products, equipment and services, including technical expertise and logistics capabilities to industrial customers. The Supply Chain Services segment manages all or part of a customer’s supply chain, including procurement and inventory management. The Innovative Pumping Solutions segment provides source for engineering, systems design and fabrication. It operates from approximately 190 locations in over 40 states in the United States, approximately 10 provinces in Canada, Dubai and one state in Mexico. The Company’s product categories include rotating equipment, bearings & power transmission, industrial supplies, metal working and safety products & services.

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