Compass Diversified (NYSE:CODI) and DWS Municipal Income Trust (NYSE:KTF) Head-To-Head Survey

Compass Diversified (NYSE:CODI) and DWS Municipal Income Trust (NYSE:KTF) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Compass Diversified has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, DWS Municipal Income Trust has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Institutional and Insider Ownership

72.7% of Compass Diversified shares are held by institutional investors. Comparatively, 57.7% of DWS Municipal Income Trust shares are held by institutional investors. 1.6% of Compass Diversified shares are held by insiders. Comparatively, 1.0% of DWS Municipal Income Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Compass Diversified and DWS Municipal Income Trust”s top-line 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	0.48	-$226.41 million	($3.91)	-3.08
DWS Municipal Income Trust	N/A	N/A	N/A	N/A	N/A

DWS Municipal Income Trust has lower revenue, but higher earnings than Compass Diversified.

Profitability

This table compares Compass Diversified and DWS Municipal Income Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Diversified	-12.30%	-9.53%	0.06%
DWS Municipal Income Trust	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent recommendations for Compass Diversified and DWS Municipal Income Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	4	1	0	2.00
DWS Municipal Income Trust	0	0	0	0	0.00

Compass Diversified currently has a consensus price target of $12.75, indicating a potential upside of 5.82%. Given Compass Diversified’s stronger consensus rating and higher probable upside, equities analysts plainly believe Compass Diversified is more favorable than DWS Municipal Income Trust.

Summary

Compass Diversified beats DWS Municipal Income Trust on 8 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 DWS Municipal Income Trust

Deutsche Municipal Income Trust is a closed-ended fixed income mutual fund launched and managed by Deutsche Investment Management Americas, Inc. It invests in the fixed income markets of the United States. The fund primarily invests in investment-grade tax-exempt municipal securities which are exempt from federal income tax. It seeks to invest in securities that are rated Baa or BBB or better by Moody’s or S&P. The fund benchmarks the performance of its portfolio against the Barclays Municipal Bond Index. It was formerly known as DWS Municipal Income Trust. Deutsche Municipal Income Trust was formed on October 20, 1988 and is domiciled in the United States.