Head to Head Contrast: Compass Diversified (NYSE:CODI) and PIMCO Strategic Income Fund (NYSE:RCS)

Compass Diversified (NYSE:CODI) and PIMCO Strategic Income Fund (NYSE:RCS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and target prices for Compass Diversified and PIMCO Strategic Income Fund, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	3	1	0	2.00
PIMCO Strategic Income Fund	0	0	0	0	0.00

Compass Diversified currently has a consensus price target of $12.75, suggesting a potential upside of 23.08%. Given Compass Diversified’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Compass Diversified is more favorable than PIMCO Strategic Income Fund.

Profitability

This table compares Compass Diversified and PIMCO Strategic Income Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-12.30%	-9.53%	0.06%
PIMCO Strategic Income Fund	N/A	N/A	N/A

Valuation & Earnings

This table compares Compass Diversified and PIMCO Strategic Income Fund”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Diversified	$1.87 billion	0.42	-$226.41 million	($3.91)	-2.65
PIMCO Strategic Income Fund	N/A	N/A	N/A	N/A	N/A

PIMCO Strategic Income Fund has lower revenue, but higher earnings than Compass Diversified.

Risk and Volatility

Compass Diversified has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, PIMCO Strategic Income Fund has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Institutional & Insider Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 13.5% of PIMCO Strategic Income Fund shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Compass Diversified beats PIMCO Strategic Income 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 PIMCO Strategic Income Fund

PIMCO Strategic Global Government Fund, Inc. is a closed-ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Pacific Investment Management Company LLC. It invests in fixed income markets across the globe. The fund primarily invests in government securities, including bonds issued or guaranteed by the United States or foreign governments, by their agencies, authorities or instrumentalities, or by supranational entities. It employs fundamental analysis with a focus on top down stock picking approach to create its portfolio. PIMCO Strategic Global Government Fund, Inc. was formed on February 24, 1994 and is domiciled in the United States.