A recent analysis of two small-cap finance companies, Compass Diversified (NYSE:CODI) and BlackRock MuniVest Fund (NYSE:MVF), reveals that Compass Diversified demonstrates superior performance across several critical financial metrics. This comparison focuses on profitability, valuation, institutional ownership, dividends, risk, and analyst recommendations.
Profitability and Valuation Insights
The assessment highlights that Compass Diversified outperforms BlackRock MuniVest Fund in key profitability indicators such as net margins, return on equity, and return on assets. Specifically, Compass Diversified reported higher gross revenue and earnings per share (EPS) compared to its competitor. This financial strength suggests that Compass Diversified is more efficient at converting revenue into actual profit.
Ownership and Analyst Ratings
Institutional ownership figures indicate strong confidence in Compass Diversified, with 72.7% of its shares held by institutional investors. In contrast, BlackRock MuniVest Fund has only 48.2% institutional ownership. Additionally, 1.8% of Compass Diversified’s shares are owned by company insiders, compared to 1.0% for BlackRock MuniVest Fund. Such ownership structures typically suggest a favorable outlook for long-term growth.
Analysts have also shown a positive bias toward Compass Diversified. As reported by MarketBeat.com, it has a consensus price target of $18.00, indicating a potential upside of 140.80%. This optimistic outlook reflects analysts’ belief in Compass Diversified’s stronger market position compared to BlackRock MuniVest Fund.
Risk assessment further illustrates the differences between the two firms. Compass Diversified has a beta of 1.06, meaning its stock price is 6% more volatile than the S&P 500. Meanwhile, BlackRock MuniVest Fund’s beta stands at 0.58, indicating it is 42% less volatile than the S&P 500. This suggests that while Compass Diversified may offer greater potential returns, it also carries higher risk.
In summary, Compass Diversified has bested BlackRock MuniVest Fund in all ten factors examined, making it a more attractive option for investors seeking growth in the small-cap finance space.
About the Companies
Founded in 2006, Compass Diversified is based in Westport, Connecticut, with an additional office in Costa Mesa, California. This private equity firm specializes in acquiring niche industrial and consumer companies, targeting investments between $100 million and $800 million in businesses with EBITDA ranging from $15 million to $80 million. The firm typically seeks to acquire controlling ownership interests and holds its investments for five to seven years.
On the other hand, BlackRock MuniVest Fund, established on September 29, 1988, is a closed-ended fixed income mutual fund managed by BlackRock Advisors, LLC. The fund focuses on investment-grade, long-term municipal obligations in the United States, particularly those exempt from federal income taxes. It aims to invest in securities with maturities of over ten years, reflecting a conservative approach to fixed-income investments.
As investors consider their options in the finance sector, the contrasting performances of Compass Diversified and BlackRock MuniVest Fund provide key insights into potential growth and risk factors.
