Comparing Cannae (CNNE) & Compass Diversified (CODI)

Cannae (NYSE: CNNE) 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 institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Valuation and Earnings

This table compares Cannae and Compass Diversified’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cannae $1.34 billion 0.92 $650.00 million $1.62 10.79
Compass Diversified $978.31 million 1.00 $54.68 million ($1.15) -14.26

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.

Dividends

Compass Diversified pays an annual dividend of $1.44 per share and has a dividend yield of 8.8%. Cannae does not pay a dividend. Compass Diversified pays out -125.2% of its earnings in the form of a dividend.

Profitability

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

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

Insider & Institutional Ownership

69.9% of Cannae shares are owned by institutional investors. Comparatively, 33.9% of Compass Diversified shares are owned by institutional investors. 6.0% of Cannae shares are owned by insiders. Comparatively, 2.4% of Compass Diversified shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cannae and Compass Diversified, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cannae 0 0 0 0 N/A
Compass Diversified 0 0 1 0 3.00

Compass Diversified has a consensus price target of $20.00, indicating a potential upside of 21.95%. Given Compass Diversified’s higher possible upside, analysts plainly believe Compass Diversified is more favorable than Cannae.

Risk and Volatility

Cannae has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Summary

Cannae beats Compass Diversified on 8 of the 15 factors compared between the two stocks.

Cannae Company Profile

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.

Compass Diversified 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).

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