DNOW (NYSE:DNOW – Get Free Report) and Gates Industrial (NYSE:GTES – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.
Institutional and Insider Ownership
97.6% of DNOW shares are owned by institutional investors. Comparatively, 98.5% of Gates Industrial shares are owned by institutional investors. 2.7% of DNOW shares are owned by insiders. Comparatively, 2.7% of Gates Industrial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk & Volatility
DNOW has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, Gates Industrial has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| DNOW | $2.82 billion | 0.43 | -$89.00 million | ($0.29) | -39.93 |
| Gates Industrial | $3.44 billion | 1.77 | $251.40 million | $0.97 | 24.78 |
Gates Industrial has higher revenue and earnings than DNOW. DNOW is trading at a lower price-to-earnings ratio than Gates Industrial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares DNOW and Gates Industrial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DNOW | -2.66% | 7.26% | 4.68% |
| Gates Industrial | 7.30% | 10.36% | 5.27% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for DNOW and Gates Industrial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DNOW | 1 | 1 | 2 | 0 | 2.25 |
| Gates Industrial | 0 | 5 | 6 | 0 | 2.55 |
DNOW presently has a consensus price target of $17.00, indicating a potential upside of 46.80%. Gates Industrial has a consensus price target of $30.27, indicating a potential upside of 25.95%. Given DNOW’s higher possible upside, equities research analysts plainly believe DNOW is more favorable than Gates Industrial.
Summary
Gates Industrial beats DNOW on 12 of the 13 factors compared between the two stocks.
About DNOW
DNOW Inc. distributes downstream energy and industrial products for petroleum refining, chemical processing, LNG terminals, power generation utilities, and customer on-site locations in the United States, Canada, and internationally. The company provides consumable maintenance, repair, and operating supplies; pipes, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical instrumentations, artificial lift, pumping solutions, valve actuation and modular process, and measurement and control equipment; and mill supplies, tools, safety supplies, and personal protective equipment, as well as artificial lift systems, coatings, and miscellaneous expendable items. It also offers original equipment manufacturer equipment, including pumps, generator sets, air compressors, dryers, blowers, mixers, and valves; modular oil and gas tank battery solutions; and application systems, work processes, parts integration, optimization solutions, and after-sales support services. In addition, the company provides supply chain and materials management; inventory planning and management, procurement, and warehouse management, as well as solutions for logistics, point of issue technology, project management, business process, and performance metrics reporting services. It serves customers in the upstream, midstream, and downstream sectors of the energy industry, including drilling contractors, well-servicing companies, independent and national oil and gas companies, midstream operators, and refineries, as well as petrochemical, chemical, utilities, RNG facilities, and other downstream energy processors; and industrial and manufacturing companies. The company was formerly known as NOW Inc. and changed its name to DNOW Inc. in January 2024. DNOW Inc. was founded in 1862 and is headquartered in Houston, Texas.
About Gates Industrial
Gates Industrial Corporation PLC designs and manufactures power transmission equipment. Its products serves harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation.
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