Comparing Compass Diversified (CODI) & Nova Lifestyle (NVFY)

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

Volatility & Risk

Compass Diversified has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Nova Lifestyle has a beta of 2.43, indicating that its stock price is 143% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Compass Diversified 2.99% 3.09% 1.11%
Nova Lifestyle 4.03% 10.29% 8.77%

Institutional & Insider Ownership

34.4% of Compass Diversified shares are owned by institutional investors. Comparatively, 3.7% of Nova Lifestyle shares are owned by institutional investors. 3.4% of Compass Diversified shares are owned by company insiders. Comparatively, 38.9% of Nova Lifestyle shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Compass Diversified and Nova Lifestyle, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Compass Diversified 0 0 0 0 N/A
Nova Lifestyle 0 0 0 0 N/A

Earnings & Valuation

This table compares Compass Diversified and Nova Lifestyle’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Compass Diversified $1.27 billion 0.70 $27.99 million N/A N/A
Nova Lifestyle $106.49 million 0.18 $3.76 million N/A N/A

Compass Diversified has higher revenue and earnings than Nova Lifestyle.

Dividends

Compass Diversified pays an annual dividend of $1.44 per share and has a dividend yield of 9.7%. Nova Lifestyle does not pay a dividend.

Summary

Compass Diversified beats Nova Lifestyle on 6 of the 11 factors compared between the two stocks.

About Compass Diversified

Compass Diversified Holdings LLC is a private equity firm specializing in acquisitions, buyouts, industry consolidation, recapitalization, and middle market investments. It seeks to invest in niche industrial or branded consumer companies, manufacturing, distribution, consumer products, business services sector, safety & security, electronic components, food, foodservice. The firm prefers to invest in companies based in North America. It seeks to invest between $4 million and $700 million in companies with cash flows between $10 million and $450 million, enterprise values between $100 million and $500 million, and an EBITDA between $5 million and $75 million. It seeks to acquire controlling ownership interests in its portfolio companies and can make additional platform acquisitions. The firm prefer to have majority, and minority stake in companies. The firm invests through its balance sheet and typically holds investments between five to seven years. Compass Group Management LLC is the external manager of the Compass Diversified Holdings LLC and manages day-to-day business and operations of firm. Compass Diversified Holdings LLC was founded in 2005 and is based in Westport, Connecticut with an additional office in Irvine, California.

About Nova Lifestyle

Nova LifeStyle, Inc., together with its subsidiaries, designs, manufactures, markets, and sells residential and commercial furniture for middle and upper middle-income consumers worldwide. The company offers upholstered, wood, and metal-based residential furniture for the living rooms, dining rooms, bedrooms, and home offices. Its products include sofas, chairs, dining tables, beds, entertainment consoles, cabinets, and cupboards. The company offers its products under the Diamond Sofa, Colorful World, Giorgio Mobili, and Bright Swallow brands. It sells its products through Internet sales and direct sales primarily to furniture distributors and retailers. Nova LifeStyle, Inc. was founded in 2003 and is headquartered in Commerce, California.

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