DNOW (NYSE:DNOW – Get Free Report) and Applied Industrial Technologies (NYSE:AIT – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.
Earnings & Valuation
This table compares DNOW and Applied Industrial Technologies”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| DNOW | $2.82 billion | 1.04 | -$89.00 million | ($1.07) | -15.23 |
| Applied Industrial Technologies | $4.97 billion | 2.16 | $414.52 million | $11.30 | 26.00 |
Applied Industrial Technologies has higher revenue and earnings than DNOW. DNOW is trading at a lower price-to-earnings ratio than Applied Industrial Technologies, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and price targets for DNOW and Applied Industrial Technologies, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DNOW | 0 | 3 | 3 | 1 | 2.71 |
| Applied Industrial Technologies | 0 | 0 | 7 | 0 | 3.00 |
DNOW presently has a consensus price target of $18.20, suggesting a potential upside of 11.66%. Applied Industrial Technologies has a consensus price target of $380.00, suggesting a potential upside of 29.33%. Given Applied Industrial Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Applied Industrial Technologies is more favorable than DNOW.
Profitability
This table compares DNOW and Applied Industrial Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DNOW | -4.58% | 3.91% | 2.25% |
| Applied Industrial Technologies | 8.38% | 22.68% | 13.97% |
Volatility & Risk
DNOW has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Applied Industrial Technologies has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.
Insider and Institutional Ownership
97.6% of DNOW shares are owned by institutional investors. Comparatively, 93.5% of Applied Industrial Technologies shares are owned by institutional investors. 1.9% of DNOW shares are owned by company insiders. Comparatively, 1.6% of Applied Industrial Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Applied Industrial Technologies 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 Applied Industrial Technologies
Applied Industrial Technologies, Inc. distributes industrial motion, power, control, and automation technology solutions in North America, Australia, New Zealand, and Singapore. It operates in two segments, Service Center Based Distribution, and Engineered Solutions. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, automation solutions, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, filtration supplies, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies. In addition, the company provides technical support services; engages in the distribution of fluid power and industrial flow control products; advanced automation solutions, including machine vision, robotics, motion control, and smart technologies. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as government entities. The company was formerly known as Bearings, Inc. and changed its to name to Applied Industrial Technologies, Inc. in 1997. The company was founded in 1923 and is headquartered in Cleveland, Ohio.
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