Financial Review: Localiza Rent a Car (OTCMKTS:LZRFY) versus DNOW (NYSE:DNOW)

DNOW (NYSE:DNOW) and Localiza Rent a Car (OTCMKTS:LZRFY) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for DNOW and Localiza Rent a Car, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNOW	1	1	3	1	2.67
Localiza Rent a Car	1	0	0	0	1.00

DNOW currently has a consensus price target of $18.25, suggesting a potential upside of 13.47%. Given DNOW’s stronger consensus rating and higher probable upside, research analysts plainly believe DNOW is more favorable than Localiza Rent a Car.

Institutional and Insider Ownership

97.6% of DNOW shares are owned by institutional investors. 1.9% of DNOW shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares DNOW and Localiza Rent a Car’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DNOW	-4.58%	3.91%	2.25%
Localiza Rent a Car	7.43%	13.79%	4.18%

Earnings and Valuation

This table compares DNOW and Localiza Rent a Car”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNOW	$2.82 billion	1.03	-$89.00 million	($1.07)	-15.03
Localiza Rent a Car	$7.48 billion	N/A	$335.90 million	$0.60	11.42

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

Summary

Localiza Rent a Car beats DNOW on 7 of the 13 factors compared between the two stocks.

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.

About Localiza Rent a Car

Localiza Rent a Car S.A. engages in car and fleet rental business. The company is also involved in granting franchises; sale of decommissioned and used cars; provision of sundry automotive, and travel and tourism services; and managing claims for insurance companies, as well as provision of tracking and telemetry services. It operates car rental agencies in Brazil, Argentina, Colombia, Ecuador, and Paraguay. The company serves individuals and legal entities. Localiza Rent a Car S.A. was founded in 1973 and is headquartered in Belo Horizonte, Brazil.