Compass Diversified Holdings (NYSE: CODI) and iShares Nasdaq Biotechnology Index Fund (NASDAQ:IBB) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.
Valuation and Earnings
This table compares Compass Diversified Holdings and iShares Nasdaq Biotechnology Index Fund’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Compass Diversified Holdings||$978.31 million||1.03||$54.68 million||($0.52)||-32.40|
|iShares Nasdaq Biotechnology Index Fund||N/A||N/A||N/A||N/A||N/A|
Compass Diversified Holdings has higher revenue and earnings than iShares Nasdaq Biotechnology Index Fund.
Institutional & Insider Ownership
33.2% of Compass Diversified Holdings shares are owned by institutional investors. Comparatively, 57.5% of iShares Nasdaq Biotechnology Index Fund shares are owned by institutional investors. 2.4% of Compass Diversified Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent ratings for Compass Diversified Holdings and iShares Nasdaq Biotechnology Index Fund, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Compass Diversified Holdings||0||0||2||0||3.00|
|iShares Nasdaq Biotechnology Index Fund||0||0||1||0||3.00|
Compass Diversified Holdings currently has a consensus price target of $19.50, suggesting a potential upside of 15.73%. Given Compass Diversified Holdings’ higher probable upside, analysts clearly believe Compass Diversified Holdings is more favorable than iShares Nasdaq Biotechnology Index Fund.
Risk & Volatility
Compass Diversified Holdings has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, iShares Nasdaq Biotechnology Index Fund has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.
Compass Diversified Holdings pays an annual dividend of $1.44 per share and has a dividend yield of 8.5%. iShares Nasdaq Biotechnology Index Fund pays an annual dividend of $0.69 per share and has a dividend yield of 0.2%. Compass Diversified Holdings pays out -276.9% of its earnings in the form of a dividend.
This table compares Compass Diversified Holdings and iShares Nasdaq Biotechnology Index Fund’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Compass Diversified Holdings||2.20%||6.42%||3.06%|
|iShares Nasdaq Biotechnology Index Fund||N/A||N/A||N/A|
Compass Diversified Holdings beats iShares Nasdaq Biotechnology Index Fund on 9 of the 11 factors compared between the two stocks.
Compass Diversified Holdings Company Profile
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).
iShares Nasdaq Biotechnology Index Fund Company Profile
iShares Nasdaq Biotechnology ETF (the Fund), formerly iShares Nasdaq Biotechnology Index Fund, is an exchange-traded fund (ETF). The Fund seeks investment results that correspond generally to the price and yield performance of the NASDAQ Biotechnology Index (the Index). The Index contains securities of NASDAQ listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals, which also meet other eligibility criteria determined by NASDAQ. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund’s investment advisor is BlackRock Fund Advisors, which is indirectly owned by BlackRock, Inc.
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