Contrasting Remitly Global (NASDAQ:RELY) and Compass Diversified (NYSE:CODI)

Compass Diversified (NYSE:CODI) and Remitly Global (NASDAQ:RELY) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Compass Diversified and Remitly Global, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	2	3	0	2.33
Remitly Global	0	1	10	2	3.08

Compass Diversified currently has a consensus target price of $16.50, suggesting a potential upside of 46.64%. Remitly Global has a consensus target price of $27.78, suggesting a potential upside of 31.27%. Given Compass Diversified’s higher probable upside, equities research analysts plainly believe Compass Diversified is more favorable than Remitly Global.

Profitability

This table compares Compass Diversified and Remitly Global’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%
Remitly Global	16.85%	33.33%	21.92%

Risk and Volatility

Compass Diversified has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Remitly Global has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500.

Earnings & Valuation

This table compares Compass Diversified and Remitly Global”s 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	0.45	-$226.41 million	($2.17)	-5.19
Remitly Global	$1.64 billion	2.74	$67.93 million	$1.39	15.22

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

Institutional & Insider Ownership

72.7% of Compass Diversified shares are held by institutional investors. Comparatively, 74.3% of Remitly Global shares are held by institutional investors. 1.6% of Compass Diversified shares are held by insiders. Comparatively, 6.5% of Remitly Global shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Remitly Global beats Compass Diversified on 12 of the 15 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 Remitly Global

Remitly Global, Inc. provides digital financial services for immigrants and their families. It primarily offers cross-border remittance services in approximately 170 countries. The company was incorporated in 2011 and is headquartered in Seattle, Washington.