Ferguson (NYSE:FERG – Get Free Report) and DNOW (NYSE:DNOW – Get Free Report) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.
Institutional & Insider Ownership
82.0% of Ferguson shares are held by institutional investors. Comparatively, 97.6% of DNOW shares are held by institutional investors. 0.2% of Ferguson shares are held by company insiders. Comparatively, 1.9% of DNOW shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility & Risk
Ferguson has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, DNOW has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ferguson | 0 | 6 | 10 | 1 | 2.71 |
| DNOW | 1 | 1 | 3 | 1 | 2.67 |
Ferguson presently has a consensus target price of $276.61, suggesting a potential upside of 18.33%. DNOW has a consensus target price of $17.00, suggesting a potential upside of 22.61%. Given DNOW’s higher possible upside, analysts clearly believe DNOW is more favorable than Ferguson.
Profitability
This table compares Ferguson and DNOW’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ferguson | 6.98% | 38.81% | 12.83% |
| DNOW | -4.14% | 4.94% | 2.97% |
Valuation & Earnings
This table compares Ferguson and DNOW”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ferguson | $31.32 billion | 1.45 | $1.86 billion | $8.60 | 27.18 |
| DNOW | $2.82 billion | 0.90 | -$89.00 million | ($0.73) | -18.99 |
Ferguson has higher revenue and earnings than DNOW. DNOW is trading at a lower price-to-earnings ratio than Ferguson, indicating that it is currently the more affordable of the two stocks.
Summary
Ferguson beats DNOW on 11 of the 14 factors compared between the two stocks.
About Ferguson
Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.
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.
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