Gates Industrial (NYSE:GTES) vs. DNOW (NYSE:DNOW) Financial Contrast

DNOW (NYSE:DNOW) and Gates Industrial (NYSE:GTES) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for DNOW and Gates Industrial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNOW	0	1	2	1	3.00
Gates Industrial	0	6	6	0	2.50

DNOW currently has a consensus price target of $17.67, suggesting a potential upside of 7.43%. Gates Industrial has a consensus price target of $29.67, suggesting a potential upside of 5.82%. Given DNOW’s stronger consensus rating and higher probable upside, equities research analysts plainly believe DNOW is more favorable than Gates Industrial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DNOW	3.91%	9.35%	6.55%
Gates Industrial	7.30%	10.36%	5.27%

Earnings and Valuation

This table compares DNOW and Gates Industrial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNOW	$2.37 billion	0.73	$81.00 million	$0.87	18.90
Gates Industrial	$3.44 billion	2.10	$194.90 million	$0.91	30.81

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

Insider and Institutional Ownership

97.6% of DNOW shares are held by institutional investors. Comparatively, 98.5% of Gates Industrial shares are held by institutional investors. 2.7% of DNOW shares are held by company insiders. Comparatively, 2.7% of Gates Industrial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

DNOW has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Gates Industrial has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Summary

Gates Industrial beats DNOW on 10 of the 14 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 Gates Industrial

Gates Industrial Corporation PLC designs and manufactures power transmission equipment. Its products serves harsh and hazardous industries such as agriculture, construction, manufacturing and energy, to everyday consumer applications such as printers, power washers, automatic doors and vacuum cleaners and virtually every form of transportation.