Sleep Number (NASDAQ:SNBR) and Compass Diversified (NYSE:CODI) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.
Analyst Ratings
This is a breakdown of current recommendations for Sleep Number and Compass Diversified, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Sleep Number | 1 | 3 | 2 | 0 | 2.17 |
Compass Diversified | 0 | 0 | 3 | 0 | 3.00 |
Sleep Number currently has a consensus price target of $129.50, suggesting a potential downside of 6.14%. Compass Diversified has a consensus price target of $21.00, suggesting a potential downside of 12.75%. Given Sleep Number's higher possible upside, research analysts clearly believe Sleep Number is more favorable than Compass Diversified.
Earnings and Valuation
This table compares Sleep Number and Compass Diversified's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Sleep Number | $1.70 billion | 2.25 | $81.85 million | $2.70 | 50.92 |
Compass Diversified | $1.45 billion | 1.08 | $301.86 million | $1.73 | 13.90 |
Compass Diversified has lower revenue, but higher earnings than Sleep Number. Compass Diversified is trading at a lower price-to-earnings ratio than Sleep Number, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
94.3% of Sleep Number shares are owned by institutional investors. Comparatively, 28.6% of Compass Diversified shares are owned by institutional investors. 6.0% of Sleep Number shares are owned by company insiders. Comparatively, 2.7% of Compass Diversified shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Sleep Number and Compass Diversified's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Sleep Number | 5.89% | -70.15% | 12.10% |
Compass Diversified | -1.23% | 12.05% | 5.06% |
Volatility and Risk
Sleep Number has a beta of 2.07, meaning that its share price is 107% more volatile than the S&P 500. Comparatively, Compass Diversified has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.
Summary
Sleep Number beats Compass Diversified on 10 of the 14 factors compared between the two stocks.