Analyzing DNOW (NYSE:DNOW) and Diploma (OTCMKTS:DPLMF)

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

Institutional & Insider Ownership

97.6% of DNOW shares are owned by institutional investors. 2.6% of DNOW shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DNOW	9.70%	9.93%	6.80%
Diploma	N/A	N/A	N/A

Valuation and Earnings

This table compares DNOW and Diploma”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNOW	$2.34 billion	0.55	$247.00 million	$2.17	5.52
Diploma	N/A	N/A	N/A	N/A	N/A

DNOW has higher revenue and earnings than Diploma.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for DNOW and Diploma, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNOW	0	1	1	0	2.50
Diploma	0	0	0	0	N/A

DNOW currently has a consensus target price of $15.50, indicating a potential upside of 29.44%. Given DNOW’s higher probable upside, analysts clearly believe DNOW is more favorable than Diploma.

Summary

DNOW beats Diploma on 8 of the 8 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 Diploma

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, Continental Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies technology-enabled products used in surgical procedures in operating theatres and endoscopy; testing equipment and services for clinical laboratories; and bio-pharma, food safety and testing, and other research-oriented products. It serves hospitals, clinical laboratories, and research facilities. The Seals sector supplies various seals, gaskets, cylinders, components, and kits used in heavy mobile machinery; and O-rings, fittings, hydraulic and industrial hoses, pneumatics products, pumps, and related accessories. The Controls sector offers wire and cabling, interconnect, specialty fasteners, and adhesive and industrial automation solutions for various applications. Diploma PLC was incorporated in 1999 and is based in London, the United Kingdom.