Analyzing DNOW (NYSE:DNOW) and Core & Main (NYSE:CNM)

Core & Main (NYSE:CNM) and DNOW (NYSE:DNOW) are both mid-cap industrials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Volatility & Risk

Core & Main has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, DNOW has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares Core & Main and DNOW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Core & Main	5.87%	26.17%	8.58%
DNOW	-4.58%	3.91%	2.25%

Earnings & Valuation

This table compares Core & Main and DNOW”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Core & Main	$7.65 billion	1.17	$441.00 million	$2.36	19.60
DNOW	$2.82 billion	1.07	-$89.00 million	($1.07)	-15.62

Core & Main has higher revenue and earnings than DNOW. DNOW is trading at a lower price-to-earnings ratio than Core & Main, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Core & Main and DNOW, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Core & Main	0	5	7	0	2.58
DNOW	1	1	3	1	2.67

Core & Main currently has a consensus price target of $56.70, suggesting a potential upside of 22.59%. DNOW has a consensus price target of $18.25, suggesting a potential upside of 9.22%. Given Core & Main’s higher possible upside, research analysts plainly believe Core & Main is more favorable than DNOW.

Institutional and Insider Ownership

94.2% of Core & Main shares are owned by institutional investors. Comparatively, 97.6% of DNOW shares are owned by institutional investors. 1.5% of Core & Main shares are owned by company insiders. Comparatively, 1.9% of DNOW shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Core & Main beats DNOW on 11 of the 15 factors compared between the two stocks.

About Core & Main

Core & Main, Inc. is a specialty distributor focused on water, wastewater, storm drainage and fire protection products, and related services. The company provides infrastructure solutions to municipalities, private water companies and professional contractors across municipal, non-residential, and residential end markets, nationwide. The company was founded in 1874 and is headquartered in St. Louis, MO.

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.