Analyzing Compass Diversified (NYSE:CODI) & Brookfield Wealth Solutions (NYSE:BNT)

Brookfield Wealth Solutions (NYSE:BNT) and Compass Diversified (NYSE:CODI) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Brookfield Wealth Solutions and Compass Diversified, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brookfield Wealth Solutions	0	1	0	0	2.00
Compass Diversified	1	2	3	0	2.33

Compass Diversified has a consensus price target of $16.50, indicating a potential upside of 51.11%. Given Compass Diversified’s stronger consensus rating and higher possible upside, analysts clearly believe Compass Diversified is more favorable than Brookfield Wealth Solutions.

Profitability

This table compares Brookfield Wealth Solutions and Compass Diversified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brookfield Wealth Solutions	0.15%	0.10%	0.01%
Compass Diversified	-5.38%	-10.36%	-0.10%

Earnings and Valuation

This table compares Brookfield Wealth Solutions and Compass Diversified”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brookfield Wealth Solutions	$11.63 billion	1.07	$766.00 million	$0.26	142.06
Compass Diversified	$1.87 billion	0.44	-$226.41 million	($2.17)	-5.03

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

Institutional and Insider Ownership

20.3% of Brookfield Wealth Solutions shares are owned by institutional investors. Comparatively, 72.7% of Compass Diversified shares are owned by institutional investors. 1.0% of Brookfield Wealth Solutions shares are owned by insiders. Comparatively, 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 company is poised for long-term growth.

Risk and Volatility

Brookfield Wealth Solutions has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Summary

Brookfield Wealth Solutions beats Compass Diversified on 9 of the 14 factors compared between the two stocks.

About Brookfield Wealth Solutions

Brookfield Wealth Solutions is focused on securing the financial futures of individuals and institutions through a range of retirement services, wealth protection products and tailored capital solutions. Through our operating subsidiaries, we offer a broad range of insurance products and services, including annuities, personal and commercial property and casualty insurance and life insurance.The company was incorporated in 2020 and is headquartered in Pembroke, Bermuda.

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.