Analyzing Adams Natural Resources Fund (NYSE:PEO) & Compass Diversified (NYSE:CODI)

Adams Natural Resources Fund (NYSE:PEO) and Compass Diversified (NYSE:CODI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Profitability

This table compares Adams Natural Resources Fund and Compass Diversified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adams Natural Resources Fund	N/A	N/A	N/A
Compass Diversified	0.56%	13.43%	3.98%

Valuation & Earnings

This table compares Adams Natural Resources Fund and Compass Diversified”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adams Natural Resources Fund	N/A	N/A	N/A	N/A	N/A
Compass Diversified	$2.20 billion	0.25	$12.81 million	($1.28)	-5.63

Compass Diversified has higher revenue and earnings than Adams Natural Resources Fund.

Risk & Volatility

Adams Natural Resources Fund has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Adams Natural Resources Fund and Compass Diversified, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adams Natural Resources Fund	0	0	0	0	0.00
Compass Diversified	0	2	2	0	2.50

Compass Diversified has a consensus price target of $26.00, suggesting a potential upside of 260.61%. Given Compass Diversified’s stronger consensus rating and higher probable upside, analysts plainly believe Compass Diversified is more favorable than Adams Natural Resources Fund.

Insider & Institutional Ownership

33.5% of Adams Natural Resources Fund shares are owned by institutional investors. Comparatively, 72.7% of Compass Diversified shares are owned by institutional investors. 0.1% of Adams Natural Resources Fund shares are owned by company insiders. Comparatively, 1.8% of Compass Diversified shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Compass Diversified beats Adams Natural Resources Fund on 10 of the 10 factors compared between the two stocks.

About Adams Natural Resources Fund

Adams Natural Resources Fund, Inc. is a publicly owned investment manager. The firm invests in the public equity markets across the globe. The firm manages closed-end equity fund focused on the energy and material sectors. It invests in stocks of companies of all market capitalizations operating in the energy and natural resources sector including oil companies, exploration and production, utilities, services, and basic materials sectors. The firm employs a fundamental analysis with a bottom-up stock picking approach while focusing on earnings growth prospects, defendable market position, market competition, macroeconomic backdrop, cash flow generation, valuation, capital allocation, return on capital, mileposts and catalysts, and point in cycle identification to make its investments. It benchmarks the performance of its portfolios against a composite index of 80% Dow Jones Oil and Gas Index and 20% Dow Jones Basic Materials Index. The firm was formerly known as Petroleum & Resources Corporation. Adams Natural Resources Fund, Inc. was founded in 1929 and is based in Baltimore, Maryland with an additional office in Boston, Massachusetts.

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.