Financial Comparison: Compass Diversified (NYSE:CODI) and Flywire (NASDAQ:FLYW)

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

Earnings and Valuation

This table compares Compass Diversified and Flywire”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	0.45	-$226.41 million	($2.17)	-5.12
Flywire	$623.03 million	3.47	$13.50 million	$0.26	68.27

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

Profitability

This table compares Compass Diversified and Flywire’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%
Flywire	4.77%	4.08%	2.81%

Insider & Institutional Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 95.9% of Flywire shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by insiders. Comparatively, 5.0% of Flywire shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Compass Diversified has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Flywire has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Compass Diversified and Flywire, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	2	3	0	2.33
Flywire	0	7	8	0	2.53

Compass Diversified currently has a consensus price target of $16.50, indicating a potential upside of 48.45%. Flywire has a consensus price target of $20.23, indicating a potential upside of 13.98%. Given Compass Diversified’s higher possible upside, research analysts clearly believe Compass Diversified is more favorable than Flywire.

Summary

Flywire beats Compass Diversified on 12 of the 14 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 Flywire

Flywire Corporation, together with its subsidiaries, operates as a payments enablement and software company in the United States and internationally. Its payment platform and network, and vertical-specific software help clients to get paid and help their customers to pay. The company’s platform facilitates payment flows across multiple currencies, payment types, and payment options, as well as provides direct connections to alternative payment methods, such as Alipay, Boleto, PayPal/Venmo, and Trustly. It serves education, healthcare, travel, and business to business organizations. The company was formerly known as peerTransfer Corporation and changed its name to Flywire Corporation in December 2016. Flywire Corporation was incorporated in 2009 and is headquartered in Boston, Massachusetts.