Comparing DNOW (NYSE:DNOW) and Drilling Tools International (NASDAQ:DTI)

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

Insider and Institutional Ownership

2.8% of Drilling Tools International shares are held by institutional investors. Comparatively, 97.6% of DNOW shares are held by institutional investors. 14.7% of Drilling Tools International shares are held by company insiders. Comparatively, 2.6% of DNOW shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Drilling Tools International has a beta of -0.93, suggesting that its stock price is 193% less volatile than the S&P 500. Comparatively, DNOW has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Drilling Tools International and DNOW’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Drilling Tools International	$152.03 million	1.02	$14.75 million	$0.43	12.07
DNOW	$2.32 billion	0.66	$247.00 million	$2.17	6.62

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Drilling Tools International	8.21%	14.88%	9.04%
DNOW	10.30%	10.39%	6.89%

Analyst Recommendations

This is a summary of current ratings for Drilling Tools International and DNOW, as provided by MarketBeat.com.

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

Drilling Tools International presently has a consensus target price of $5.75, suggesting a potential upside of 10.79%. DNOW has a consensus target price of $15.50, suggesting a potential upside of 7.86%. Given Drilling Tools International’s higher probable upside, research analysts plainly believe Drilling Tools International is more favorable than DNOW.

About Drilling Tools International

Drilling Tools International Corporation provides oilfield equipment and services to oil and natural gas sectors in North America, Europe, and the Middle East. It offers downhole tool rentals, machining, and inspection services to support the global drilling and wellbore construction industry. The company also provides products are bottom hole assembly components, such as stabilizers, subs, non-magnetic and steel drill collars, hole openers, and roller reamers, as well as drill pipe and drill pipe accessories; ancillary equipment and handling tools to support its rental platform, including float valves, ring gauges, tool baskets, lift bail, lift subs, mud magnets, elevators, bracket and bail assemblies, slips, tongs, stabbing guides and safety clamps; and blowout preventers, and pressure control accessory equipment. In addition, it offers tool rental services, which consists of rental, inspection, machining, and repair services; rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas; rents kellys, pip joints, work strings; maintains a fleet of rental equipment consisting of drill collars, stabilizers, crossover subs, wellbore conditioning tools, drill pipe, hevi-wate drill pipe, and tubing; rents surface control equipment, such as blowout preventers and handling tools; and provides downhole products for producing wells. Drilling Tools International Corporation is headquartered in Houston, Texas.

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.