Compass Diversified (NYSE:CODI) & DTF Tax-Free Income 2028 Term Fund (NYSE:DTF) Critical Review

Compass Diversified (NYSE:CODI) and DTF Tax-Free Income 2028 Term Fund (NYSE:DTF) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Earnings and Valuation

This table compares Compass Diversified and DTF Tax-Free Income 2028 Term Fund”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Diversified	$1.87 billion	0.48	-$226.41 million	($3.91)	-3.04
DTF Tax-Free Income 2028 Term Fund	N/A	N/A	N/A	N/A	N/A

DTF Tax-Free Income 2028 Term Fund has lower revenue, but higher earnings than Compass Diversified.

Risk & Volatility

Compass Diversified has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, DTF Tax-Free Income 2028 Term Fund has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Insider & Institutional Ownership

72.7% of Compass Diversified shares are held by institutional investors. Comparatively, 43.8% of DTF Tax-Free Income 2028 Term Fund shares are held by institutional investors. 1.6% of Compass Diversified shares are held by company insiders. Comparatively, 0.2% of DTF Tax-Free Income 2028 Term Fund shares are held by company 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.

Analyst Ratings

This is a summary of recent ratings and price targets for Compass Diversified and DTF Tax-Free Income 2028 Term Fund, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	4	1	0	2.00
DTF Tax-Free Income 2028 Term Fund	0	0	0	0	0.00

Compass Diversified currently has a consensus target price of $12.75, suggesting a potential upside of 7.28%. Given Compass Diversified’s stronger consensus rating and higher possible upside, research analysts clearly believe Compass Diversified is more favorable than DTF Tax-Free Income 2028 Term Fund.

Profitability

This table compares Compass Diversified and DTF Tax-Free Income 2028 Term Fund’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%
DTF Tax-Free Income 2028 Term Fund	N/A	N/A	N/A

Summary

Compass Diversified beats DTF Tax-Free Income 2028 Term Fund 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 DTF Tax-Free Income 2028 Term Fund

DTF Tax-Free Income 2028 Term Fund Inc. is a closed-ended fixed income mutual fund launched by Virtus Investment Partners, Inc. The fund is managed by Duff & Phelps Investment Management Co. It invests primarily in a diversified portfolio of investment grade tax-exempt utility obligations. The fund invests in various sectors, such as water and sewer, electric utilities, prerefunded utilities, pollution control, and nonutilities. It invests in the fixed income markets of the United States. It was formerly known as DTF Tax-Free Income Inc. DTF Tax-Free Income 2028 Term Fund Inc. was formed on November, 1991 and is domiciled in the United States.