Head-To-Head Comparison: Compass Diversified (NYSE:CODI) versus Remitly Global (NASDAQ:RELY)

Remitly Global (NASDAQ:RELY) and Compass Diversified (NYSE:CODI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Remitly Global and Compass Diversified, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Remitly Global	0	1	10	2	3.08
Compass Diversified	1	2	3	0	2.33

Remitly Global currently has a consensus target price of $27.78, indicating a potential upside of 25.24%. Compass Diversified has a consensus target price of $16.50, indicating a potential upside of 51.38%. Given Compass Diversified’s higher probable upside, analysts clearly believe Compass Diversified is more favorable than Remitly Global.

Risk & Volatility

Remitly Global has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Remitly Global	16.85%	33.33%	21.92%
Compass Diversified	-5.38%	-10.36%	-0.10%

Institutional & Insider Ownership

74.3% of Remitly Global shares are owned by institutional investors. Comparatively, 72.7% of Compass Diversified shares are owned by institutional investors. 6.5% of Remitly Global shares are owned by company insiders. Comparatively, 1.6% of Compass Diversified shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Remitly Global and Compass Diversified”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Remitly Global	$1.81 billion	2.59	$67.93 million	$1.39	15.96
Compass Diversified	$1.87 billion	0.44	-$226.41 million	($2.17)	-5.02

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

Summary

Remitly Global beats Compass Diversified on 12 of the 15 factors compared between the two stocks.

About Remitly Global

Remitly Global, Inc. provides digital financial services for immigrants and their families. It primarily offers cross-border remittance services in approximately 170 countries. The company was incorporated in 2011 and is headquartered in Seattle, Washington.

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.