SPDR S&P Retail (ETF) (NYSE: XRT) and Compass Diversified Holdings (NYSE:CODI) are both small-cap investment trusts companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for SPDR S&P Retail (ETF) and Compass Diversified Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SPDR S&P Retail (ETF) 0 0 0 0 N/A
Compass Diversified Holdings 0 0 2 0 3.00

Compass Diversified Holdings has a consensus price target of $19.50, indicating a potential upside of 17.82%. Given Compass Diversified Holdings’ higher possible upside, analysts clearly believe Compass Diversified Holdings is more favorable than SPDR S&P Retail (ETF).

Profitability

This table compares SPDR S&P Retail (ETF) and Compass Diversified Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SPDR S&P Retail (ETF) 2,863.69% 23.50% 22.12%
Compass Diversified Holdings -1.31% 2.73% 1.33%

Dividends

Compass Diversified Holdings pays an annual dividend of $1.44 per share and has a dividend yield of 8.7%. SPDR S&P Retail (ETF) does not pay a dividend. Compass Diversified Holdings pays out -261.8% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares SPDR S&P Retail (ETF) and Compass Diversified Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
SPDR S&P Retail (ETF) N/A N/A N/A ($4.15) -9.68
Compass Diversified Holdings $978.31 million 1.01 $54.68 million ($0.55) -30.09

Compass Diversified Holdings has higher revenue and earnings than SPDR S&P Retail (ETF). Compass Diversified Holdings is trading at a lower price-to-earnings ratio than SPDR S&P Retail (ETF), indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

33.2% of Compass Diversified Holdings shares are owned by institutional investors. 2.4% of Compass Diversified Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Compass Diversified Holdings beats SPDR S&P Retail (ETF) on 8 of the 11 factors compared between the two stocks.

About SPDR S&P Retail (ETF)

SPDR S&P Retail ETF (the Fund) seeks to replicate as closely as possible the performance of the S&P Retail Select Industry Index (the Index). The Index is an equal weighted market cap index. The Index represents the retail sub-industry portion of the S&P Total Market Index. The Fund invests in industries, such as apparel retail, automotive retail, food retail, department stores, Internet retail, general merchandise stores, drug retail, and hypermarkets and super centers. The Fund’s investment advisor is SSgA Funds Management, Inc.

About Compass Diversified Holdings

Compass Diversified Holdings (the Trust) and Compass Group Diversified Holdings, LLC, (the Company), acquires and manages small and middle-market businesses. The Company operates through segments include Acquisition Corp. (5.11 Tactical), The Ergo Baby Carrier, Inc. (Ergobaby), Liberty Safe and Security Products, Inc. (Liberty), Fresh Hemp Foods Ltd. (Manitoba Harvest), Compass AC Holdings, Inc. (ACI), AMT Acquisition Corporation (Arnold), Clean Earth Holdings, Inc. (Clean Earth), and Sterno Products, LLC (Sterno) segments. The Company categorizes the businesses into separate groups of businesses, such as branded consumer businesses and niche industrial businesses. The Company also owns a non-controlling interest in Fox Factory Holding Corp. (FOX). Compass Group Management LLC, (CGM or the Manager), manages the day to day operations of the Company and oversees the management and operations of its businesses pursuant to a management services agreement (MSA).

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