Critical Contrast: Compass Diversified (NYSE:CODI) & John Hancock Investors Trust (NYSE:JHI)

John Hancock Investors Trust (NYSE:JHI) and Compass Diversified (NYSE:CODI) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Risk & Volatility

John Hancock Investors Trust has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares John Hancock Investors Trust and Compass Diversified”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
John Hancock Investors Trust	N/A	N/A	N/A	N/A	N/A
Compass Diversified	$1.87 billion	0.26	-$226.41 million	($3.88)	-1.65

John Hancock Investors Trust has higher earnings, but lower revenue than Compass Diversified.

Profitability

This table compares John Hancock Investors Trust and Compass Diversified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
John Hancock Investors Trust	N/A	N/A	N/A
Compass Diversified	-12.09%	24.48%	-0.32%

Insider & Institutional Ownership

27.0% of John Hancock Investors Trust shares are owned by institutional investors. Comparatively, 72.7% of Compass Diversified shares are owned by institutional investors. 1.8% of Compass Diversified shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for John Hancock Investors Trust and Compass Diversified, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
John Hancock Investors Trust	0	0	0	0	0.00
Compass Diversified	2	2	1	0	1.80

Compass Diversified has a consensus price target of $11.50, indicating a potential upside of 79.77%. Given Compass Diversified’s stronger consensus rating and higher possible upside, analysts clearly believe Compass Diversified is more favorable than John Hancock Investors Trust.

Summary

Compass Diversified beats John Hancock Investors Trust on 8 of the 10 factors compared between the two stocks.

About John Hancock Investors Trust

John Hancock Investors Trust is a closed-ended fixed income mutual fund launched and managed by John Hancock Investment Management LLC. It is co-managed by John Hancock Asset Management. It invests in the fixed income markets across the globe. The fund primarily invests in a diversified portfolio of corporate and government bonds, debt securities. It benchmarks the performance of its portfolio against the Barclays Capital U.S. Aggregate Bond Index. John Hancock Investors Trust was formed on January 29, 1971 and is domiciled in the United States.

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.