Head-To-Head Comparison: Compass Diversified (NYSE:CODI) vs. VanEck Biotech ETF (NASDAQ:BBH)

Compass Diversified (NYSE:CODI) and VanEck Biotech ETF (NASDAQ:BBH) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Institutional & Insider Ownership

72.7% of Compass Diversified shares are held by institutional investors. Comparatively, 32.1% of VanEck Biotech ETF shares are held by institutional investors. 1.8% of Compass Diversified shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Compass Diversified and VanEck Biotech ETF, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	2	2	2	0	2.00
VanEck Biotech ETF	0	7	1	0	2.67

Compass Diversified presently has a consensus target price of $14.00, indicating a potential upside of 117.97%. VanEck Biotech ETF has a consensus target price of $195.33, indicating a potential upside of 0.00%. Given Compass Diversified’s higher possible upside, research analysts plainly believe Compass Diversified is more favorable than VanEck Biotech ETF.

Valuation & Earnings

This table compares Compass Diversified and VanEck Biotech ETF”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Diversified	$2.20 billion	0.22	-$208.86 million	($2.74)	-2.34
VanEck Biotech ETF	N/A	N/A	N/A	N/A	N/A

VanEck Biotech ETF has lower revenue, but higher earnings than Compass Diversified.

Risk and Volatility

Compass Diversified has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, VanEck Biotech ETF has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-7.08%	24.48%	-0.73%
VanEck Biotech ETF	N/A	N/A	N/A

Summary

Compass Diversified beats VanEck Biotech ETF on 7 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 VanEck Biotech ETF

The BIOTECH HOLDING COMPANY DEPOSITARY RECEIPTS or HOLDRS TRUST was formed under the depositary trust agreement, among The Bank of New York, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Biotech HOLDRS. The trust currently holds shares of common stock or American depositary shares issued by a group of companies that were, at the time of the initial offering, generally considered to be involved in various segments of thebiotechnology industry.