Comparing BlackRock MuniHoldings California Quality Fund (NYSE:MUC) & Compass Diversified (NYSE:CODI)

BlackRock MuniHoldings California Quality Fund (NYSE:MUC) and Compass Diversified (NYSE:CODI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of recent ratings and target prices for BlackRock MuniHoldings California Quality Fund and Compass Diversified, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock MuniHoldings California Quality Fund	0	0	0	0	0.00
Compass Diversified	1	3	1	0	2.00

Compass Diversified has a consensus target price of $12.75, indicating a potential upside of 26.68%. Given Compass Diversified’s stronger consensus rating and higher possible upside, analysts plainly believe Compass Diversified is more favorable than BlackRock MuniHoldings California Quality Fund.

Valuation & Earnings

This table compares BlackRock MuniHoldings California Quality Fund and Compass Diversified”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock MuniHoldings California Quality Fund	N/A	N/A	N/A	N/A	N/A
Compass Diversified	$1.87 billion	0.40	-$226.41 million	($3.91)	-2.57

BlackRock MuniHoldings California Quality Fund has higher earnings, but lower revenue than Compass Diversified.

Risk and Volatility

BlackRock MuniHoldings California Quality Fund has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Insider and Institutional Ownership

31.0% of BlackRock MuniHoldings California Quality Fund shares are owned by institutional investors. Comparatively, 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares BlackRock MuniHoldings California Quality Fund and Compass Diversified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock MuniHoldings California Quality Fund	N/A	N/A	N/A
Compass Diversified	-12.30%	-9.53%	0.06%

Summary

Compass Diversified beats BlackRock MuniHoldings California Quality Fund on 8 of the 10 factors compared between the two stocks.

About BlackRock MuniHoldings California Quality Fund

BlackRock MuniHoldings California Quality Fund, Inc. is a closed ended fixed income mutual fund launched by BlackRock, Inc. It is managed by BlackRock Advisors, LLC. The fund invests in fixed income markets. It invests primarily in a portfolio of long-term investment-grade municipal obligations, the interest on which is exempt from Federal and California income taxes. BlackRock MuniHoldings California Quality Fund, Inc. was formed in 1997 and is domiciled in United States.

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.