Contrasting DNOW (NYSE:DNOW) & Innovex International (NYSE:INVX)

Innovex International (NYSE:INVX) and DNOW (NYSE:DNOW) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Risk and Volatility

Innovex International has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, DNOW has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Earnings and Valuation

This table compares Innovex International and DNOW”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovex International	$550.34 million	2.06	$600,000.00	$1.41	11.94
DNOW	$2.37 billion	0.78	$81.00 million	$0.73	23.91

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

Profitability

This table compares Innovex International and DNOW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovex International	12.31%	-0.73%	-0.61%
DNOW	3.41%	9.04%	6.28%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Innovex International and DNOW, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovex International	1	0	0	1	2.50
DNOW	0	1	1	0	2.50

Innovex International presently has a consensus target price of $15.00, indicating a potential downside of 10.87%. DNOW has a consensus target price of $17.00, indicating a potential downside of 2.60%. Given DNOW’s higher possible upside, analysts clearly believe DNOW is more favorable than Innovex International.

Institutional & Insider Ownership

97.6% of DNOW shares are owned by institutional investors. 3.1% of Innovex International shares are owned by insiders. Comparatively, 2.6% of DNOW shares are owned 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.

Summary

DNOW beats Innovex International on 9 of the 14 factors compared between the two stocks.

About Innovex International

Innovex International, Inc. engages in the provision of solutions for both onshore and offshore applications within the oil and gas industry. The company was founded on September 15, 2016 and is headquartered in Humble, TX.

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.