Compass Diversified (NYSE: CODI) and Cannae (NYSE:CNNE) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Compass Diversified and Cannae, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Compass Diversified 0 0 2 0 3.00
Cannae 0 0 0 0 N/A

Compass Diversified currently has a consensus target price of $19.50, suggesting a potential upside of 15.38%. Given Compass Diversified’s higher probable upside, equities analysts clearly believe Compass Diversified is more favorable than Cannae.

Earnings and Valuation

This table compares Compass Diversified and Cannae’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Compass Diversified $978.31 million 1.03 $54.68 million ($1.17) -14.44
Cannae $1.34 billion 0.97 $650.00 million $1.62 11.36

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

Profitability

This table compares Compass Diversified and Cannae’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Compass Diversified -1.31% 2.77% 1.32%
Cannae 7.05% 1.76% 0.86%

Insider & Institutional Ownership

33.4% of Compass Diversified shares are held by institutional investors. Comparatively, 71.0% of Cannae shares are held by institutional investors. 2.4% of Compass Diversified shares are held by insiders. Comparatively, 6.0% of Cannae shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Compass Diversified pays an annual dividend of $1.44 per share and has a dividend yield of 8.5%. Cannae does not pay a dividend. Compass Diversified pays out -123.1% of its earnings in the form of a dividend.

Volatility and Risk

Compass Diversified has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Cannae has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

About Compass Diversified

Compass Diversified Holdings (the Trust) and Compass Group Diversified Holdings, LLC, (the Company), acquires and manages small and middle-market businesses. The Company operates through segments include Acquisition Corp. (5.11 Tactical), The Ergo Baby Carrier, Inc. (Ergobaby), Liberty Safe and Security Products, Inc. (Liberty), Fresh Hemp Foods Ltd. (Manitoba Harvest), Compass AC Holdings, Inc. (ACI), AMT Acquisition Corporation (Arnold), Clean Earth Holdings, Inc. (Clean Earth), and Sterno Products, LLC (Sterno) segments. The Company categorizes the businesses into separate groups of businesses, such as branded consumer businesses and niche industrial businesses. The Company also owns a non-controlling interest in Fox Factory Holding Corp. (FOX). Compass Group Management LLC, (CGM or the Manager), manages the day to day operations of the Company and oversees the management and operations of its businesses pursuant to a management services agreement (MSA).

About Cannae

Cannae Holdings, Inc. is a diversified holding company. The Company has investments in a variety of industries including Restaurants, Technology Enabled Healthcare Services, Financial Services and more. The Company holds majority and minority equity investment stakes in a number of entities, including Ceridian Holdings, LLC, American Blue Ribbon Holdings, and LLC and T-System Holding LLC.

Receive News & Ratings for Compass Diversified Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Compass Diversified and related companies with MarketBeat.com's FREE daily email newsletter.