NOW (NYSE: DNOW) and MRC Global (NYSE:MRC) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitabiliy, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Valuation and Earnings

This table compares NOW and MRC Global’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NOW $2.34 billion 0.62 -$81.00 million ($1.56) -8.65
MRC Global $3.12 billion 0.49 $45.00 million ($0.73) -22.05

MRC Global has higher revenue and earnings than NOW. MRC Global is trading at a lower price-to-earnings ratio than NOW, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for NOW and MRC Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NOW 0 4 5 0 2.56
MRC Global 0 2 4 0 2.67

NOW currently has a consensus target price of $19.33, suggesting a potential upside of 43.32%. MRC Global has a consensus target price of $20.43, suggesting a potential upside of 26.89%. Given NOW’s higher probable upside, research analysts plainly believe NOW is more favorable than MRC Global.

Profitability

This table compares NOW and MRC Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NOW -7.14% -7.83% -5.63%
MRC Global -1.40% 0.39% 0.13%

Insider & Institutional Ownership

98.7% of NOW shares are owned by institutional investors. Comparatively, 96.7% of MRC Global shares are owned by institutional investors. 3.3% of NOW shares are owned by insiders. Comparatively, 6.3% of MRC Global 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.

Risk & Volatility

NOW has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, MRC Global has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Summary

MRC Global beats NOW on 9 of the 13 factors compared between the two stocks.

NOW Company Profile

NOW Inc. (NOW) is a global distributor to the oil and gas and industrial markets. The Company operates under the DistributionNOW and Wilson Export brands. Its segments include the United States, Canada and International. As of December 31, 2016, its segments, the United States, Canada and International, had over 200, 55 and 35 locations, respectively. The United States segment comprises United States Energy, United States Supply Chain and United States Process Solutions. NOW’s energy product offerings are used in the oil and gas industry, including upstream drilling and completion, exploration and production, midstream infrastructure development and downstream petroleum refining, as well as in other industries, such as chemical processing, power generation and industrial manufacturing operations. It provides supply chain management to drilling contractors, exploration and production (E&P) operators, midstream operators, downstream energy and industrial manufacturing companies.

MRC Global Company Profile

MRC Global Inc. is an industrial distributor of pipe, valves and fittings and related products and services to the energy industry. The Company’s segments include the U.S., Canada and International. Its U.S. segment includes the United States Eastern Region and Gulf Coast, and the United States Western Region. It provides services, such as product testing, manufacturer assessments, daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging and system interfaces customized to customer and supplier specifications for tracking and replenishing inventory, engineering of control packages, and valve inspection and repair. The Company’s principal product types include valves, automation, measurement and instrumentation; carbon steel fittings and flanges; stainless steel and alloy fittings, flanges and pipe; gas products; line pipe, and other.

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