Reviewing NOW (DNOW) & Lawson Products (LAWS)
NOW (NYSE: DNOW) and Lawson Products (NASDAQ:LAWS) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitabiliy and analyst recommendations.
Insider & Institutional Ownership
99.1% of NOW shares are held by institutional investors. Comparatively, 65.1% of Lawson Products shares are held by institutional investors. 3.3% of NOW shares are held by insiders. Comparatively, 18.2% of Lawson Products shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares NOW and Lawson Products’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NOW||$2.34 billion||0.57||-$81.00 million||($1.56)||-7.93|
|Lawson Products||$287.14 million||0.71||$6.80 million||$0.56||40.89|
Lawson Products has higher revenue, but lower earnings than NOW. NOW is trading at a lower price-to-earnings ratio than Lawson Products, indicating that it is currently the more affordable of the two stocks.
This table compares NOW and Lawson Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for NOW and Lawson Products, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NOW presently has a consensus target price of $19.33, suggesting a potential upside of 56.29%. Lawson Products has a consensus target price of $25.00, suggesting a potential upside of 9.17%. Given NOW’s higher possible upside, equities analysts clearly believe NOW is more favorable than Lawson Products.
Volatility and Risk
NOW has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Lawson Products has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.
Lawson Products beats NOW on 9 of the 13 factors compared between the two stocks.
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.
About Lawson Products
Lawson Products, Inc. is a distributor of products and services the industrial, commercial, institutional and government maintenance, repair and operations (MRO) market. The Company’s product categories include fastening systems, fluid power, specialty chemicals, cutting tools and abrasives, electrical, aftermarket automotive supplies, safety, welding and metal repair, and other. The Company supplies a range of automotive products, including body hardware, body shop, brake/wheel, fleet/truck, repair harness assembly and other parts. The Company offers approximately 200,000 different core products for sale of which approximately 50,000 products are maintained in its distribution centers. The Company’s customers operate in a range of industries, including automotive repair, commercial vehicle maintenance, government, manufacturing, food processing, distribution, construction, oil and gas, mining, wholesale and service.
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