Critical Survey: CompoSecure (NASDAQ:CMPO) and Mayville Engineering (NYSE:MEC)

CompoSecure (NASDAQ:CMPO) and Mayville Engineering (NYSE:MEC) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk and Volatility

CompoSecure has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Mayville Engineering has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Earnings & Valuation

This table compares CompoSecure and Mayville Engineering’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$390.94 million	1.34	$18.66 million	$0.72	9.19
Mayville Engineering	$539.39 million	0.42	$18.73 million	$0.64	17.39

Mayville Engineering has higher revenue and earnings than CompoSecure. CompoSecure is trading at a lower price-to-earnings ratio than Mayville Engineering, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

34.3% of CompoSecure shares are owned by institutional investors. Comparatively, 42.8% of Mayville Engineering shares are owned by institutional investors. 76.1% of CompoSecure shares are owned by insiders. Comparatively, 5.9% of Mayville Engineering 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.

Profitability

This table compares CompoSecure and Mayville Engineering’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CompoSecure	3.36%	-9.06%	46.33%
Mayville Engineering	2.41%	8.02%	3.79%

Analyst Recommendations

This is a summary of recent recommendations and price targets for CompoSecure and Mayville Engineering, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	0	6	0	3.00
Mayville Engineering	0	1	3	0	2.75

CompoSecure presently has a consensus target price of $11.60, suggesting a potential upside of 75.23%. Mayville Engineering has a consensus target price of $17.33, suggesting a potential upside of 55.74%. Given CompoSecure’s stronger consensus rating and higher possible upside, equities research analysts clearly believe CompoSecure is more favorable than Mayville Engineering.

Summary

CompoSecure beats Mayville Engineering on 9 of the 14 factors compared between the two stocks.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, plastic, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authentication, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Secure Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, government agencies, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

About Mayville Engineering

Mayville Engineering Company, Inc., together with its subsidiaries, engages in the production, prototyping and tooling, fabrication, coating, and assembling of aftermarket components in the United States. It also supplies engineered components to original equipment manufacturers. The company serves heavy and medium duty commercial vehicle, construction and access equipment, powersports, agriculture, military, and other end markets. Mayville Engineering Company, Inc. was founded in 1945 and is headquartered in Mayville, Wisconsin.