Compass Diversified (NYSE: CODI) and La-Z-Boy (NYSE:LZB) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.
Insider & Institutional Ownership
34.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 88.6% of La-Z-Boy shares are owned by institutional investors. 2.4% of Compass Diversified shares are owned by company insiders. Comparatively, 3.2% of La-Z-Boy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Compass Diversified has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, La-Z-Boy has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.
This table compares Compass Diversified and La-Z-Boy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Compass Diversified and La-Z-Boy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Compass Diversified||$1.27 billion||0.77||$27.99 million||N/A||N/A|
|La-Z-Boy||$1.52 billion||0.92||$85.92 million||$1.73||17.25|
La-Z-Boy has higher revenue and earnings than Compass Diversified.
This is a breakdown of recent ratings and target prices for Compass Diversified and La-Z-Boy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Compass Diversified currently has a consensus target price of $20.00, indicating a potential upside of 21.95%. La-Z-Boy has a consensus target price of $33.00, indicating a potential upside of 10.55%. Given Compass Diversified’s stronger consensus rating and higher probable upside, analysts clearly believe Compass Diversified is more favorable than La-Z-Boy.
Compass Diversified pays an annual dividend of $1.44 per share and has a dividend yield of 8.8%. La-Z-Boy pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. La-Z-Boy pays out 27.7% of its earnings in the form of a dividend.
La-Z-Boy beats Compass Diversified on 9 of the 13 factors compared between the two stocks.
Compass Diversified Company Profile
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, and business services sectors. The firm prefers to invest in companies based in North America. It seeks to invest between $100 million and $500 million in transaction size between $4 million and $500 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 also 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 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.
La-Z-Boy Company Profile
La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Upholstery, Casegoods, and Retail segments. The Upholstery segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of Comfort Studios and England custom comfort center locations, dealers, and other independent retailers. The Casegoods segment imports, markets, and distributes casegoods/wood furniture, including bedroom sets, dining room sets, entertainment centers, and occasional pieces, as well as manufactures upholstered furniture. This segment sells its products to dealers, La-Z-Boy Furniture Galleries stores, and other independent retailers under the American Drew, Hammary, and Kincaid brands. The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. This segment operates a network of 347 La-Z-Boy Furniture Galleries stores and 557 Comfort Studio locations, as well as in-store programs with 527 outlets in Kincaid and England. La-Z-Boy Incorporated also produces reclining chairs; and manufactures and distributes residential furniture. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan.
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