MRC Global (NYSE: MRC) and NOW (NYSE:DNOW) are both small-cap industrial products companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
Institutional and Insider Ownership
97.0% of MRC Global shares are held by institutional investors. Comparatively, 99.1% of NOW shares are held by institutional investors. 6.3% of MRC Global shares are held by insiders. Comparatively, 3.3% of NOW shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares MRC Global and NOW’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MRC Global||$3.30 billion||0.45||$69.00 million||($0.73)||-21.52|
|NOW||$2.34 billion||0.56||-$81.00 million||($1.56)||-7.80|
MRC Global has higher revenue and earnings than NOW. MRC Global is trading at a lower price-to-earnings ratio than NOW, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
MRC Global has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, NOW has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for MRC Global and NOW, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MRC Global presently has a consensus price target of $21.29, suggesting a potential upside of 35.49%. NOW has a consensus price target of $19.33, suggesting a potential upside of 58.86%. Given NOW’s higher probable upside, analysts clearly believe NOW is more favorable than MRC Global.
This table compares MRC Global and NOW’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
MRC Global beats NOW on 9 of the 13 factors compared between the two stocks.
MRC Global Company Profile
MRC Global Inc. is an industrial distributor of pipe, valves and fittings and related products and services to the energy industry. The Company’s segments include the U.S., Canada and International. Its U.S. segment includes the United States Eastern Region and Gulf Coast, and the United States Western Region. It provides services, such as product testing, manufacturer assessments, daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging and system interfaces customized to customer and supplier specifications for tracking and replenishing inventory, engineering of control packages, and valve inspection and repair. The Company’s principal product types include valves, automation, measurement and instrumentation; carbon steel fittings and flanges; stainless steel and alloy fittings, flanges and pipe; gas products; line pipe, and other.
NOW Company Profile
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.
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