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Should NOW Inc. (NYSE:DNOW) Be Your Next Stock Pick?

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of NOW Inc. (NYSE:DNOW), there's is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on NOW here.

Excellent balance sheet with proven track record

DNOW delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. Not only did DNOW outperformed its past performance, its growth also surpassed the Trade Distributors industry expansion, which generated a -6.4% earnings growth. This is what investors like to see! DNOW's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that DNOW has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. DNOW's has produced operating cash levels of 2.37x total debt over the past year, which implies that DNOW's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NYSE:DNOW Income Statement, August 13th 2019

Next Steps:

For NOW, I've put together three fundamental factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for DNOW’s future growth? Take a look at our free research report of analyst consensus for DNOW’s outlook.
  2. Valuation: What is DNOW worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DNOW is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DNOW? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.