Financial Comparison: INNEOVA (NASDAQ:INEO) & DNOW (NYSE:DNOW)

DNOW (NYSE:DNOW) and INNEOVA (NASDAQ:INEO) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Institutional & Insider Ownership

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

Profitability

This table compares DNOW and INNEOVA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DNOW	-4.14%	4.94%	2.97%
INNEOVA	N/A	N/A	N/A

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNOW	1	1	3	1	2.67
INNEOVA	1	0	0	0	1.00

DNOW currently has a consensus price target of $17.00, suggesting a potential upside of 20.19%. Given DNOW’s stronger consensus rating and higher probable upside, equities research analysts clearly believe DNOW is more favorable than INNEOVA.

Earnings & Valuation

This table compares DNOW and INNEOVA”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNOW	$2.82 billion	0.92	-$89.00 million	($0.73)	-19.38
INNEOVA	$58.42 million	0.17	-$400,000.00	N/A	N/A

INNEOVA has lower revenue, but higher earnings than DNOW.

Volatility & Risk

DNOW has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, INNEOVA has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Summary

DNOW beats INNEOVA on 10 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 INNEOVA

We are a Singapore-based provider of high-quality Original Equipment Manufacturer (“OEM”), third party branded and in-house branded replacement parts for motor vehicles and for non-vehicle combustion engines serving a number of industries. We distribute spare parts through operations primarily based in Singapore and global sales primarily generated from the Middle East and Asia. Through our On-Highway Business, we supply a wide range of genuine OEM and aftermarket parts for use in passenger and commercial vehicles bearing either the manufacturer’s brands or our in-house brands through SP Zone. Through our Off-Highway Business, we supply a wide range of components and spare parts for internal combustion engines with strong focus on filtration products through Filtec. Our Off-Highway Business serves industrial sectors that include marine, energy, mining, construction, agriculture, and oil and gas industries. Our products are sourced from genuine OEM and global premium aftermarket brands to suit the diverse needs of our customers. Over the past several years, our revenues have been relatively evenly split between our On-Highway Business and our Off-Highway Business, and approximately 10.0% of our revenues are derived from sale of our in-house products. Our Group’s business can be traced back to the early 1970s, when our late founder, KE Neo, set up Chop Kim Aik, a retail shop specializing in the supply of British-made truck spare parts. KE Neo leveraged his experience as the owner of a transportation business with a fleet of trucks serving the construction industry to building a small retail shop to a large-scale operation with a solid customer base and a recognizable brand. In 1983, we diversified into the supply of Japanese made automotive spare parts to capitalize on the increase in demand for Japanese vehicles in Singapore. Riding on this global growth of Japanese automotive exports, CE Neo, with the support of his father KE Neo, set up its first automotive spare parts retail outlet in Singapore, naming it Soon Aik Auto Parts Trading Co (which became a private limited company, Soon Aik Auto Parts Trading Co. Pte Ltd in 1995, and is now known and hereinafter referred to as “SP Zone”) specializing in trading Japanese made automotive spare parts, primarily used in passenger and commercial vehicles. In the late 1980s, SP Zone achieved a major milestone when it was appointed as an authorized dealer of UD Trucks Corporation (“Nissan UD”) automotive genuine spare parts in Singapore, expanding our business of selling authorized genuine spare parts, beyond our historical aftermarket spare parts business model. The business gradually expanded, and the outlet grew to supply automotive spare parts for trucks operating in Singapore sold by respected Japanese brands from the manufacturers such as Nissan UD, Mitsubishi Fuso Truck and Bus Corporation, Hino Motors Ltd and Isuzu Motors Ltd. In 1993, Jimmy Neo and CK Neo, brothers to CE Neo and sons of KE Neo, joined SP Zone, to assist with the expanding business. In 1995, Jimmy Neo was instrumental in securing the dealership with Fleetguard Filtration Pte. Ltd. (“Fleetguard”) for Fleetguard filters, a product used in Cummins engines, pursuant to which SP Zone started distributing filters to the marine, energy, mining, agriculture, oil and gas, and construction industries (referred to as the “Off-Highway Business”) in addition to the automotive industry (referred to as the “On-Highway Business”). In 1995, SP Zone became a private limited company and expanded its sales channels to include exports to ASEAN markets, capitalizing on unmet demand as there were few suppliers supplying automotive spare parts to those markets at that time. Another major milestone in 1995 occurred when Edward Neo, the third brother and son of KE Neo, joined our Group to manage the local wholesale and retail business, allowing CE Neo to focus on our Group’s newly expanded export business. At this point, the business had grown from a small retail operation to regional family business run by a father and his four sons with multiple areas of focus and utilizing the family member’s different areas of expertise. In 1999, SP Zone secured another line of filtration products when it was appointed as a distributor for Parker Racor, a line of Parker Hannifin filtration products. Subsequently, we established Filtec as a separate Singapore subsidiary to carry out sales of Off-Highway Business dedicated to handling sales to our Off-Highway customers in the industrial sectors. In the early 2000s, Edward Neo spearheaded an effort to develop in-house branded brake parts and lubricant products, namely, VETTO and REV-1 in SP Zone, to enhance our competitiveness in the automotive industry. Over the years, the product range of our in-house brands has greatly expanded to include the NUTEQ steering and suspension parts, GENTEQ pumps and cooling system components, ELITO cables and hoses, SUNBLADE wiper blades, FILTEQ filters, and ENERGEO batteries. In 2010, we consolidated and shifted our business operations to larger headquarters and warehouse that facilitated greater efficiency in our operations and also allowed us to increase our product inventory offerings. Through our On-Highway Business, we entered the Malaysian market by first taking a 70.0% equity stake, and by 2017 a 100.0% stake, in Autozone (M), an established company that sells wholesale automotive spare parts as well as the sale of our in-house brands in Malaysia. Since 2010, we have been selling to wholesale distributors based in Dubai as part of our strategy to expand our business. Like Singapore in Asia, Dubai is an important key trading hub in the Middle East serving customers not only in the Middle East, but also Central Asia, Africa and Europe. In June 30, 2023, this business represented an estimated 11.1% of our sales. More recently, in 2019, our Off-Highway Business expanded to include the life science environmental industry, securing distribution and working in close collaboration with MANN+HUMMEL, a European-based multi-national company that provides a number of automotive and industrial commercial products, including filtration and related products with life science applications, for the distribution and promotion of their products in Singapore. In 2022, we underwent a reorganization. On February 14, 2022, Celestial obtained a 4.9% shareholding interest in SAGI from Soon Aik. On September 29, 2022, Soon Aik transferred the entire issued share capital of our group of companies, consisting of Filtec, SP Zone, Autozone (S) and Autozone (M), to SAGI. Subsequently on September 29, 2022, Soon Aik and Celestial transferred their respective shares in SAGI to the Company in exchange for equivalent proportional percentages of Ordinary Shares of the Company. On January 5, 2024, we effected a forward split, on the basis 2 Ordinary Shares for every one share of our Company, such that our authorized share capital is now US$100,000 divided into 200,000,000 outstanding shares, par value $0.0005 each. Upon completion of the group reorganization and forward stock split, Soon Aik owns 8,559,000 shares and Celestial owns 441,000 shares, and SAGI, Filtec, SP Zone, Autozone (S) and Autozone (M) are indirect subsidiaries. Our mission is to expand the scope and volume of our business by continuing to add value to our channel partners’ businesses and extend their geographic and customer reach and growth in their respective industries. We believe that through close collaboration with our channel partners, we will enhance our extensive network and provide consistent outstanding service to our customers. Our registered office in the Cayman Islands is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111 Cayman Islands with the telephone number of +1 345 949 1040. Our principal executive office is 14 Ang Mo Kio Street 63, Singapore. Our agent for service of process in the U.S. is Cogency Global Inc., 122 E. 42nd St., 18th Floor, New York, NY 10168.