Analyzing Compass Diversified (NYSE:CODI) and DNP Select Income Fund (NYSE:DNP)

Compass Diversified (NYSE:CODI) and DNP Select Income Fund (NYSE:DNP) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Volatility and Risk

Compass Diversified has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, DNP Select Income Fund has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Profitability

This table compares Compass Diversified and DNP Select Income 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%
DNP Select Income Fund	N/A	N/A	N/A

Valuation & Earnings

This table compares Compass Diversified and DNP Select Income Fund”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	0.46	-$226.41 million	($3.91)	-2.95
DNP Select Income Fund	N/A	N/A	N/A	N/A	N/A

DNP Select Income Fund has lower revenue, but higher earnings than Compass Diversified.

Analyst Recommendations

This is a summary of current recommendations and price targets for Compass Diversified and DNP Select Income Fund, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Diversified	1	3	1	0	2.00
DNP Select Income Fund	0	0	0	0	0.00

Compass Diversified currently has a consensus price target of $12.75, indicating a potential upside of 10.50%. Given Compass Diversified’s stronger consensus rating and higher probable upside, research analysts clearly believe Compass Diversified is more favorable than DNP Select Income Fund.

Insider and Institutional Ownership

72.7% of Compass Diversified shares are owned by institutional investors. Comparatively, 8.5% of DNP Select Income Fund shares are owned by institutional investors. 1.6% of Compass Diversified shares are owned by company insiders. Comparatively, 0.0% of DNP Select Income Fund shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Compass Diversified beats DNP Select Income 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 DNP Select Income Fund

DNP Select Income Fund Inc. is a closed ended balanced mutual fund launched by Virtus Investment Partners, Inc. The fund is managed by Duff & Phelps Investment Management Co. It invests in the public equity and fixed income markets of the United States. For the fixed income portion, the fund invests in bonds. It seeks to invest in stocks of companies operating in the Utility sector. The fund invests in stocks of companies across all market capitalizations. It benchmarks the performance of its portfolio against the S&P 500 Utilities Index and Barclays Capital U.S. Utility Bond Index. DNP Select Income Fund Inc. was formed on November 26, 1986 and is domiciled in the United States.