Financial Analysis: DNOW (NYSE:DNOW) vs. Core & Main (NYSE:CNM)

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

Institutional and Insider Ownership

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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent ratings for DNOW and Core & Main, as reported by MarketBeat.

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

DNOW presently has a consensus price target of $18.25, suggesting a potential upside of 10.77%. Core & Main has a consensus price target of $56.70, suggesting a potential upside of 23.70%. Given Core & Main’s higher probable upside, analysts clearly believe Core & Main is more favorable than DNOW.

Risk & Volatility

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNOW	$2.82 billion	1.06	-$89.00 million	($1.07)	-15.40
Core & Main	$7.65 billion	1.16	$441.00 million	$2.36	19.42

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.

Summary

Core & Main beats DNOW on 11 of the 15 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 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.