Critical Review: Compass Diversified (NYSE:CODI) vs. Hyperion DeFi (NASDAQ:HYPD)

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

Profitability

This table compares Compass Diversified and Hyperion DeFi’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%
Hyperion DeFi	416.56%	-11.62%	-9.96%

Insider & Institutional Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 25.8% of Hyperion DeFi shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by insiders. Comparatively, 7.5% of Hyperion DeFi shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Compass Diversified and Hyperion DeFi”s top-line revenue, earnings per share 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)	-5.10
Hyperion DeFi	$810,000.00	66.57	-$45.31 million	($6.53)	-0.53

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

Risk and Volatility

Compass Diversified has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Hyperion DeFi has a beta of 2.53, indicating that its stock price is 153% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Compass Diversified and Hyperion DeFi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	2	3	0	2.33
Hyperion DeFi	1	1	2	0	2.25

Compass Diversified presently has a consensus target price of $16.50, indicating a potential upside of 49.05%. Hyperion DeFi has a consensus target price of $9.82, indicating a potential upside of 183.14%. Given Hyperion DeFi’s higher probable upside, analysts clearly believe Hyperion DeFi is more favorable than Compass Diversified.

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 Hyperion DeFi

Eyenovia, Inc., an ophthalmic technology company, engages in the development of therapeutics based on its proprietary microdose array print platform technology. The company's product candidates include MicroPine, which is in Phase III clinical development program with indications for pediatric myopia progression (near-sightedness); MicroLine, which is in Phase III clinical development program with indications for the improvement in near vision in people with presbyopia; and Mydcombi, which is in Phase III clinical development program with indications for pharmaceutical mydriasis. It has a license agreement with Bausch Health Ireland Limited to develop and commercialize MicroPine in the United States and Canada; a license agreement with Arctic Vision (Hong Kong) Limited to develop and commercialize MicroPine, MicroLine, and Mydcombi in China and South Korea; and Senju Pharmaceutical Co., Ltd. to develop and commercialize MicroPine, MicroLine, and Mydcombi. The company was formerly known as PGP Holdings V, Inc. and changed its name to Eyenovia, Inc. in May 2014. Eyenovia, Inc. was incorporated in 2014 and is based in New York, New York.