Analyzing DNOW (NYSE:DNOW) & TX Rail Products (OTCMKTS:TXHG)

TX Rail Products (OTCMKTS:TXHG) and DNOW (NYSE:DNOW) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares TX Rail Products and DNOW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TX Rail Products	N/A	N/A	N/A
DNOW	9.70%	9.93%	6.80%

Analyst Ratings

This is a breakdown of current ratings and target prices for TX Rail Products and DNOW, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TX Rail Products	0	0	0	0	N/A
DNOW	0	1	1	0	2.50

DNOW has a consensus price target of $15.50, suggesting a potential upside of 30.03%. Given DNOW’s higher probable upside, analysts clearly believe DNOW is more favorable than TX Rail Products.

Valuation and Earnings

This table compares TX Rail Products and DNOW”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TX Rail Products	N/A	N/A	N/A	$0.01	16.00
DNOW	$2.34 billion	0.54	$247.00 million	$2.17	5.49

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

Institutional & Insider Ownership

97.6% of DNOW shares are held by institutional investors. 38.5% of TX Rail Products shares are held by company insiders. Comparatively, 2.6% of DNOW shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

DNOW beats TX Rail Products on 8 of the 10 factors compared between the two stocks.

About TX Rail Products

TX Rail Products, Inc supplies, distributes, and sells drill bits, related tools, and other mining supplies and rail products to coal mining companies in the United States. It distributes and sells drill steel mining products, such as drill bit products and accessories used for hard and soft rock mining operations; tungsten carbide drill bits and augurs; and related accessories and tools. The company also offers tee rails for use in railroad tracks for the transportation of coal by coal mine operators; steel ties for use in securing rail; switches; and related accessories and tools. It sells its products through independent sales agents to resellers; and directly to coal mine operators. The company was formerly known as TX Holdings, Inc. and changed its name to TX Rail Products, Inc in January 2024. TX Rail Products, Inc was incorporated in 2000 and is headquartered in Ashland, Kentucky.

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.