DNOW INC (DNOW) Stock Fundamental Analysis
NYSE:DNOW - New York Stock Exchange, Inc. - US67011P1003 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DNOW. DNOW was compared to 48 industry peers in the Trading Companies & Distributors industry. While DNOW has a great health rating, its profitability is only average at the moment. DNOW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
DNOW had positive earnings in the past year.
In the past year DNOW had a positive cash flow from operations.
DNOW had positive earnings in 4 of the past 5 years.
Of the past 5 years DNOW 4 years had a positive operating cash flow.
1.2 Ratios
DNOW has a Return On Assets (4.97%) which is comparable to the rest of the industry.
DNOW has a Return On Equity (7.20%) which is in line with its industry peers.
DNOW has a Return On Invested Capital (8.03%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for DNOW is in line with the industry average of 9.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 7.2% | ||
| ROIC | 8.03% |
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.52%
ROIC(5y)N/A
1.3 Margins
DNOW has a Profit Margin (3.40%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of DNOW has grown nicely.
Looking at the Operating Margin, with a value of 5.52%, DNOW is doing worse than 60.42% of the companies in the same industry.
DNOW's Operating Margin has improved in the last couple of years.
DNOW has a Gross Margin of 22.83%. This is in the lower half of the industry: DNOW underperforms 70.83% of its industry peers.
In the last couple of years the Gross Margin of DNOW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.52% | ||
| PM (TTM) | 3.4% | ||
| GM | 22.83% |
OM growth 3Y77.91%
OM growth 5Y29.34%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.32%
GM growth 5Y2.76%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DNOW is destroying value.
The number of shares outstanding for DNOW has been reduced compared to 1 year ago.
Compared to 5 years ago, DNOW has less shares outstanding
The debt/assets ratio for DNOW is higher compared to a year ago.
2.2 Solvency
DNOW has an Altman-Z score of 3.40. This indicates that DNOW is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DNOW (3.40) is comparable to the rest of the industry.
DNOW has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3.4 |
ROIC/WACC0.82
WACC9.83%
2.3 Liquidity
A Current Ratio of 2.32 indicates that DNOW has no problem at all paying its short term obligations.
DNOW's Current ratio of 2.32 is fine compared to the rest of the industry. DNOW outperforms 62.50% of its industry peers.
A Quick Ratio of 1.48 indicates that DNOW should not have too much problems paying its short term obligations.
The Quick ratio of DNOW (1.48) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
DNOW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.15%.
The Earnings Per Share has been growing by 30.83% on average over the past years. This is a very strong growth
Looking at the last year, DNOW shows a small growth in Revenue. The Revenue has grown by 2.24% in the last year.
The Revenue has been decreasing by -4.27% on average over the past years.
EPS 1Y (TTM)2.15%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%8%
Revenue 1Y (TTM)2.24%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%-0.79%
3.2 Future
DNOW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.03% yearly.
The Revenue is expected to grow by 3.50% on average over the next years.
EPS Next Y-2.07%
EPS Next 2Y1.54%
EPS Next 3Y4.86%
EPS Next 5Y6.03%
Revenue Next Year3.41%
Revenue Next 2Y3.84%
Revenue Next 3Y3.32%
Revenue Next 5Y3.5%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.76, which indicates a correct valuation of DNOW.
77.08% of the companies in the same industry are more expensive than DNOW, based on the Price/Earnings ratio.
DNOW is valuated rather cheaply when we compare the Price/Earnings ratio to 26.48, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 15.78, which indicates a correct valuation of DNOW.
Based on the Price/Forward Earnings ratio, DNOW is valued a bit cheaper than the industry average as 70.83% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of DNOW to the average of the S&P500 Index (34.04), we can say DNOW is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.76 | ||
| Fwd PE | 15.78 |
4.2 Price Multiples
DNOW's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DNOW is cheaper than 83.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DNOW is valued cheaper than 93.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.41 | ||
| EV/EBITDA | 7.92 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.51
EPS Next 2Y1.54%
EPS Next 3Y4.86%
5. Dividend
5.1 Amount
DNOW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.97
+0.1 (+0.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners101.31%
Inst Owner Change0.65%
Ins Owners2.36%
Ins Owner Change9.16%
Market Cap1.57B
Analysts82.5
Price Target17.34 (15.83%)
Short Float %3.74%
Short Ratio3.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)53%
Min EPS beat(2)24.44%
Max EPS beat(2)81.55%
EPS beat(4)3
Avg EPS beat(4)26.54%
Min EPS beat(4)-1.96%
Max EPS beat(4)81.55%
EPS beat(8)4
Avg EPS beat(8)15.07%
EPS beat(12)8
Avg EPS beat(12)17.81%
EPS beat(16)12
Avg EPS beat(16)50.45%
Revenue beat(2)2
Avg Revenue beat(2)0.54%
Min Revenue beat(2)0.02%
Max Revenue beat(2)1.07%
Revenue beat(4)2
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.38%
Max Revenue beat(4)1.07%
Revenue beat(8)3
Avg Revenue beat(8)-1.59%
Revenue beat(12)7
Avg Revenue beat(12)-0.22%
Revenue beat(16)10
Avg Revenue beat(16)0.12%
PT rev (1m)3.03%
PT rev (3m)-10.53%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.54%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.76 | ||
| Fwd PE | 15.78 | ||
| P/S | 0.65 | ||
| P/FCF | 8.41 | ||
| P/OCF | 7.83 | ||
| P/B | 1.38 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 7.92 |
EPS(TTM)0.95
EY6.35%
EPS(NY)0.95
Fwd EY6.34%
FCF(TTM)1.78
FCFY11.88%
OCF(TTM)1.91
OCFY12.77%
SpS22.92
BVpS10.84
TBVpS8.05
PEG (NY)N/A
PEG (5Y)0.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.97% | ||
| ROE | 7.2% | ||
| ROCE | 11.17% | ||
| ROIC | 8.03% | ||
| ROICexc | 9.84% | ||
| ROICexgc | 14.09% | ||
| OM | 5.52% | ||
| PM (TTM) | 3.4% | ||
| GM | 22.83% | ||
| FCFM | 7.76% |
ROA(3y)10.2%
ROA(5y)-2.26%
ROE(3y)15.11%
ROE(5y)-3.01%
ROIC(3y)9.52%
ROIC(5y)N/A
ROICexc(3y)12.59%
ROICexc(5y)N/A
ROICexgc(3y)16.61%
ROICexgc(5y)N/A
ROCE(3y)13.24%
ROCE(5y)N/A
ROICexcg growth 3Y65.23%
ROICexcg growth 5Y25.7%
ROICexc growth 3Y55.27%
ROICexc growth 5Y26.13%
OM growth 3Y77.91%
OM growth 5Y29.34%
PM growth 3Y123.35%
PM growth 5YN/A
GM growth 3Y1.32%
GM growth 5Y2.76%
F-Score7
Asset Turnover1.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 36.84% | ||
| Cap/Sales | 0.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.54% | ||
| Profit Quality | 228.05% | ||
| Current Ratio | 2.32 | ||
| Quick Ratio | 1.48 | ||
| Altman-Z | 3.4 |
F-Score7
WACC9.83%
ROIC/WACC0.82
Cap/Depr(3y)46.41%
Cap/Depr(5y)37.91%
Cap/Sales(3y)0.51%
Cap/Sales(5y)0.47%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.15%
EPS 3Y97.18%
EPS 5Y30.83%
EPS Q2Q%8%
EPS Next Y-2.07%
EPS Next 2Y1.54%
EPS Next 3Y4.86%
EPS Next 5Y6.03%
Revenue 1Y (TTM)2.24%
Revenue growth 3Y13.29%
Revenue growth 5Y-4.27%
Sales Q2Q%-0.79%
Revenue Next Year3.41%
Revenue Next 2Y3.84%
Revenue Next 3Y3.32%
Revenue Next 5Y3.5%
EBIT growth 1Y-2.21%
EBIT growth 3Y101.55%
EBIT growth 5Y23.83%
EBIT Next Year72.94%
EBIT Next 3Y25.1%
EBIT Next 5Y20.22%
FCF growth 1Y9250%
FCF growth 3Y126.11%
FCF growth 5Y6.39%
OCF growth 1Y1156.25%
OCF growth 3Y114.96%
OCF growth 5Y5.88%