Head to Head Comparison: Japan Smaller Capitalization Fund (NYSE:JOF) & Compass Diversified (NYSE:CODI)

Compass Diversified (NYSE:CODI) and Japan Smaller Capitalization Fund (NYSE:JOF) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Risk & Volatility

Compass Diversified has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Japan Smaller Capitalization Fund has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Profitability

This table compares Compass Diversified and Japan Smaller Capitalization Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-12.09%	24.48%	-0.32%
Japan Smaller Capitalization Fund	N/A	N/A	N/A

Insider and Institutional Ownership

72.7% of Compass Diversified shares are held by institutional investors. 1.8% of Compass Diversified shares are held by insiders. Comparatively, 1.0% of Japan Smaller Capitalization Fund shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Compass Diversified and Japan Smaller Capitalization Fund”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Diversified	$1.87 billion	0.23	-$226.41 million	($3.88)	-1.47
Japan Smaller Capitalization Fund	N/A	N/A	N/A	N/A	N/A

Japan Smaller Capitalization Fund has lower revenue, but higher earnings than Compass Diversified.

Analyst Recommendations

This is a summary of current recommendations for Compass Diversified and Japan Smaller Capitalization Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	4	1	0	2.00
Japan Smaller Capitalization Fund	0	0	0	0	0.00

Compass Diversified presently has a consensus price target of $11.50, indicating a potential upside of 101.93%. Given Compass Diversified’s stronger consensus rating and higher possible upside, research analysts clearly believe Compass Diversified is more favorable than Japan Smaller Capitalization Fund.

Summary

Compass Diversified beats Japan Smaller Capitalization Fund on 8 of the 10 factors compared between the two stocks.

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.

About Japan Smaller Capitalization Fund

Japan Smaller Capitalization Fund, Inc. is a closed-ended equity mutual fund launched by Nomura Asset Management U.S.A. Inc. It is managed by Nomura Asset Management Co., Ltd. The fund invests in the public equity markets of Japan. It invests in stocks traded on the Tokyo, Osaka and Nagoya Stock Exchanges, JASDAQ, Mothers, Hercules, Centrex, and other indices. The fund seeks to invest in stocks of companies operating across diversified sectors. It primarily invests in stocks of small cap companies. The fund benchmarks the performance of its portfolio against the The Russell/Nomura Small Cap Index. It was formerly known as Japan OTC Equity Fund, Inc. Japan Smaller Capitalization Fund, Inc. was formed on March 22, 1990 and is domiciled in the United States.