Reviewing Compass Diversified (NYSE:CODI) & MFS High Income Municipal Trust (NYSE:CXE)

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

Institutional and Insider Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 34.4% of MFS High Income Municipal Trust shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Compass Diversified has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, MFS High Income Municipal Trust has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Compass Diversified and MFS High Income Municipal Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	4	1	0	2.00
MFS High Income Municipal Trust	0	0	0	0	0.00

Compass Diversified presently has a consensus price target of $12.75, suggesting a potential upside of 7.77%. Given Compass Diversified’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Compass Diversified is more favorable than MFS High Income Municipal Trust.

Valuation & Earnings

This table compares Compass Diversified and MFS High Income Municipal Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Diversified	$1.87 billion	0.48	-$226.41 million	($3.88)	-3.05
MFS High Income Municipal Trust	N/A	N/A	N/A	N/A	N/A

MFS High Income Municipal Trust has lower revenue, but higher earnings than Compass Diversified.

Profitability

This table compares Compass Diversified and MFS High Income Municipal Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-12.09%	N/A	-0.32%
MFS High Income Municipal Trust	N/A	N/A	N/A

Summary

Compass Diversified beats MFS High Income Municipal Trust on 7 of the 9 factors compared between the two stocks.

About Compass Diversified

Compass Diversified is a private equity firm specializing in add on acquisitions, buyouts, industry consolidation, recapitalization, late stage and middle market investments. It seeks to invest in niche industrial or branded consumer companies, manufacturing, distribution, consumer products, business services sector, healthcare, safety & security, electronic components, food and foodservice. The firm prefers to invest in companies based in North America. It seeks to invest between $100 million and $800 million in companies with an EBITDA between $15 million to $80 million. It seeks to acquire controlling ownership interests in its portfolio companies and can make additional platform acquisitions. The firm prefer to have majority stake in companies. The firm invests through its balance sheet and typically holds investments between five to seven years. Compass Diversified was founded in 2006 and is based in Westport, Connecticut with an additional office in Costa Mesa, California.

About MFS High Income Municipal Trust

MFS High Income Municipal Trust is a close ended fixed income mutual fund launched and managed by Massachusetts Financial Services Company. The fund invests in the fixed income markets. It primarily invests in municipal bonds and local general obligations of various sectors, such as multifamily, hospitals, care retirement, and investor-owned utilities. The fund benchmarks the performance of its portfolio against Barclays Municipal Bond Index. It was formerly known as Colonial High Income Municipal Trust. MFS High Income Municipal Trust was formed on February 17, 1989 and is domiciled in United States.