Invesco Quality Municipal Income Trust (NYSE:IQI) vs. Compass Diversified (NYSE:CODI) Financial Analysis

Compass Diversified (NYSE:CODI) and Invesco Quality Municipal Income Trust (NYSE:IQI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Compass Diversified and Invesco Quality Municipal Income Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	3	2	0	2.17
Invesco Quality Municipal Income Trust	0	0	0	0	0.00

Compass Diversified presently has a consensus target price of $12.67, suggesting a potential upside of 26.45%. Given Compass Diversified’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Compass Diversified is more favorable than Invesco Quality Municipal Income Trust.

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, Invesco Quality Municipal Income Trust has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Compass Diversified and Invesco Quality Municipal Income Trust’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%
Invesco Quality Municipal Income Trust	N/A	N/A	N/A

Insider & Institutional Ownership

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

Earnings and Valuation

This table compares Compass Diversified and Invesco Quality Municipal Income Trust”s top-line 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	0.40	-$226.41 million	($3.91)	-2.56
Invesco Quality Municipal Income Trust	N/A	N/A	N/A	N/A	N/A

Invesco Quality Municipal Income Trust has lower revenue, but higher earnings than Compass Diversified.

Summary

Compass Diversified beats Invesco Quality Municipal Income Trust 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 Invesco Quality Municipal Income Trust

Invesco Quality Municipal Income Trust is a closed-ended fixed income mutual fund launched by Invesco Ltd. The fund is co-managed by Invesco Advisers, Inc., INVESCO Asset Management Deutschland GmbH, INVESCO Asset Management Limited, INVESCO Asset Management (Japan) Limited, Invesco Hong Kong Limited, INVESCO Senior Secured Management, Inc., and Invesco Canada Ltd. It invests in the fixed income markets of the United States. The fund primarily invests in investment grade municipal securities which include municipal bonds, municipal notes, and municipal commercial paper. It employs fundamental analysis with bottom-up security selection approach to create its portfolio. The fund was previously known as Morgan Stanley Quality Municipal Income Trust. Invesco Quality Municipal Income Trust was formed on September 29, 1992 and is domiciled in the United States.