SiteOne Landscape Supply (NYSE:SITE) versus DNOW (NYSE:DNOW) Critical Review

SiteOne Landscape Supply (NYSE:SITE) and DNOW (NYSE:DNOW) are both mid-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Insider and Institutional Ownership

97.6% of DNOW shares are held by institutional investors. 2.1% of SiteOne Landscape Supply shares are held by insiders. Comparatively, 1.9% of DNOW shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for SiteOne Landscape Supply and DNOW, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SiteOne Landscape Supply	0	7	5	0	2.42
DNOW	0	3	3	1	2.71

SiteOne Landscape Supply currently has a consensus target price of $121.00, indicating a potential upside of 17.11%. DNOW has a consensus target price of $18.20, indicating a potential upside of 16.00%. Given SiteOne Landscape Supply’s higher possible upside, analysts clearly believe SiteOne Landscape Supply is more favorable than DNOW.

Profitability

This table compares SiteOne Landscape Supply and DNOW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SiteOne Landscape Supply	3.41%	9.76%	4.83%
DNOW	-4.58%	3.91%	2.25%

Earnings & Valuation

This table compares SiteOne Landscape Supply and DNOW”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SiteOne Landscape Supply	$4.77 billion	0.94	$155.40 million	$3.65	28.31
DNOW	$2.82 billion	1.01	-$89.00 million	($1.07)	-14.66

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

Risk & Volatility

SiteOne Landscape Supply has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, DNOW has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Summary

SiteOne Landscape Supply beats DNOW on 10 of the 15 factors compared between the two stocks.

About SiteOne Landscape Supply

SiteOne Landscape Supply, Inc., together with its subsidiaries, engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides irrigation products, including controllers, valves, sprinkler heads, irrigation pipes, micro irrigation, and drip products; fertilizer, grass seed, and ice melt products; control products, such as herbicides, fungicides, rodenticides, and other pesticides; landscape accessories that include mulches, soil amendments, drainage pipes, tools, and sods; nursery goods, which consist of deciduous and evergreen shrubs, ornamental, shade, evergreen trees, field grown and container-grown nursery stock, roses, perennials, annuals, bulbs, and plant species and cultivars; hardscapes, such as pavers, natural stones, blocks, and other durable materials; and outdoor lighting products that include lighting fixtures, LED lamps, wires, transformers, and accessories. It also offers consultative services consisting of assistance with irrigation project take-offs, commercial project planning, generation of sales leads, business operations, and product support services, as well as a series of technical and business management seminars; and distributes branded products of third parties. The company offers its products under the LESCO, SiteOne Green Tech, and Pro-Trade brand names. It markets its products primarily to residential and commercial landscape professionals who specializes in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. was incorporated in 2013 and is headquartered in Roswell, Georgia.

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.