Comparing Remitly Global (NASDAQ:RELY) and Compass Diversified (NYSE:CODI)

Compass Diversified (NYSE:CODI) and Remitly Global (NASDAQ:RELY) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Profitability

This table compares Compass Diversified and Remitly Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-5.38%	-10.36%	-0.10%
Remitly Global	16.85%	33.33%	21.92%

Risk & Volatility

Compass Diversified has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Remitly Global has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.

Insider and Institutional Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 74.3% of Remitly Global shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by insiders. Comparatively, 6.5% of Remitly Global 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.

Valuation & Earnings

This table compares Compass Diversified and Remitly Global”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	0.44	-$226.41 million	($2.17)	-5.02
Remitly Global	$1.81 billion	2.59	$67.93 million	$1.39	15.96

Remitly Global has lower revenue, but higher earnings than Compass Diversified. Compass Diversified is trading at a lower price-to-earnings ratio than Remitly Global, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Compass Diversified and Remitly Global, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	2	3	0	2.33
Remitly Global	0	1	10	2	3.08

Compass Diversified currently has a consensus price target of $16.50, suggesting a potential upside of 51.38%. Remitly Global has a consensus price target of $27.78, suggesting a potential upside of 25.24%. Given Compass Diversified’s higher probable upside, research analysts plainly believe Compass Diversified is more favorable than Remitly Global.

Summary

Remitly Global beats Compass Diversified on 12 of the 15 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 Remitly Global

Remitly Global, Inc. provides digital financial services for immigrants and their families. It primarily offers cross-border remittance services in approximately 170 countries. The company was incorporated in 2011 and is headquartered in Seattle, Washington.