CODI gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 97 industry peers in the Financial Services industry. CODI may be in some trouble as it scores bad on both profitability and health. CODI has a expensive valuation and it also scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year CODI has reported negative net income.
CODI had a negative operating cash flow in the past year.
In multiple years CODI reported negative net income over the last 5 years.
The reported operating cash flow has been mixed in the past 5 years: CODI reported negative operating cash flow in multiple years.

1.2 Ratios

CODI has a Return On Assets of -3.12%. This is amonst the worse of the industry: CODI underperforms 83.51% of its industry peers.
CODI has a Return On Equity of -9.75%. This is in the lower half of the industry: CODI underperforms 79.38% of its industry peers.
With a decent Return On Invested Capital value of 6.33%, CODI is doing good in the industry, outperforming 71.13% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CODI is below the industry average of 8.46%.
The last Return On Invested Capital (6.33%) for CODI is above the 3 year average (4.59%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	-3.12%
ROE	-9.75%
ROIC	6.33%

ROA(3y)1.22%

ROA(5y)0.97%

ROE(3y)3.42%

ROE(5y)2.78%

ROIC(3y)4.59%

ROIC(5y)4.28%

1.3 Margins

Looking at the Operating Margin, with a value of 10.80%, CODI is in line with its industry, outperforming 44.33% of the companies in the same industry.
In the last couple of years the Operating Margin of CODI has grown nicely.
CODI has a better Gross Margin (45.63%) than 65.98% of its industry peers.
CODI's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	10.8%
PM (TTM)	N/A
GM	45.63%

OM growth 3Y8.37%

OM growth 5Y18.91%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y4.66%

GM growth 5Y4.7%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CODI is destroying value.
CODI has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for CODI has been increased compared to 5 years ago.
CODI has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.24, we must say that CODI is in the distress zone and has some risk of bankruptcy.
CODI's Altman-Z score of 1.24 is fine compared to the rest of the industry. CODI outperforms 61.86% of its industry peers.
A Debt/Equity ratio of 1.36 is on the high side and indicates that CODI has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.36, CODI is doing worse than 61.86% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	1.36
Debt/FCF	N/A
Altman-Z	1.24

ROIC/WACC0.86

WACC7.37%

2.3 Liquidity

A Current Ratio of 4.07 indicates that CODI has no problem at all paying its short term obligations.
With an excellent Current ratio value of 4.07, CODI belongs to the best of the industry, outperforming 88.66% of the companies in the same industry.
A Quick Ratio of 1.57 indicates that CODI should not have too much problems paying its short term obligations.
CODI has a better Quick ratio (1.57) than 74.23% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	4.07
Quick Ratio	1.57

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

CODI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -109.34%.
The Earnings Per Share has been growing slightly by 6.59% on average over the past years.
CODI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.87%.
The Revenue has been growing by 11.72% on average over the past years. This is quite good.

EPS 1Y (TTM)-109.34%

EPS 3Y-4.24%

EPS 5Y6.59%

EPS Q2Q%-209.37%

Revenue 1Y (TTM)11.87%

Revenue growth 3Y4.39%

Revenue growth 5Y11.72%

Sales Q2Q%-18.89%

3.2 Future

CODI is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -55.84% yearly.
The Revenue is expected to decrease by -8.70% on average over the next years.

EPS Next Y-130%

EPS Next 2Y-55.84%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year-16.72%

Revenue Next 2Y-8.7%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

CODI reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Also next year CODI is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A

4.2 Price Multiples

CODI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CODI is cheaper than 90.72% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	5.12

4.3 Compensation for Growth

A cheap valuation may be justified as CODI's earnings are expected to decrease with -55.84% in the coming years.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-55.84%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

CODI has a Yearly Dividend Yield of 10.11%, which is a nice return.
CODI's Dividend Yield is rather good when compared to the industry average which is at 2.09. CODI pays more dividend than 96.91% of the companies in the same industry.
CODI's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	10.11%

5.2 History

The dividend of CODI decreases each year by -13.06%.
CODI has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of CODI decreased in the last 3 years.

Dividend Growth(5Y)-13.06%

Div Incr Years0

Div Non Decr Years2

5.3 Sustainability

The earnings of CODI are negative and hence is the payout ratio. CODI will probably not be able to sustain this dividend level.
CODI's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.

DP-79.81%

EPS Next 2Y-55.84%

EPS Next 3YN/A

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COMPASS DIVERSIFIED HOLDINGS / CODI FAQ

What is the fundamental rating for CODI stock?

ChartMill assigns a fundamental rating of 3 / 10 to CODI.

Can you provide the valuation status for COMPASS DIVERSIFIED HOLDINGS?

ChartMill assigns a valuation rating of 1 / 10 to COMPASS DIVERSIFIED HOLDINGS (CODI). This can be considered as Overvalued.

How profitable is COMPASS DIVERSIFIED HOLDINGS (CODI) stock?

COMPASS DIVERSIFIED HOLDINGS (CODI) has a profitability rating of 3 / 10.

How sustainable is the dividend of COMPASS DIVERSIFIED HOLDINGS (CODI) stock?

The dividend rating of COMPASS DIVERSIFIED HOLDINGS (CODI) is 5 / 10 and the dividend payout ratio is -79.81%.