Current Analysis: Compass Diversified Holdings (CODI)

Compass Diversified Holdings (CODI) is a diversified business conglomerate based in the United States having two groups: branded consumer business and industrial business. 

Branded consumer businesses are characterized as those businesses that capitalize on a valuable brand name in their respective market sector. It includes 5.11, Ergobaby, Liberty Safe, and Velocity Outdoor. 

Industrial businesses are characterized as those businesses that focus on manufacturing and selling particular products and industrial services within a specific market sector. The company has operations in the United States, Canada, Europe, Asia Pacific, and other International areas.

Compass Diversified was founded in 2006 and is based in Westport, Connecticut with an additional office in Costa Mesa, California.

Three key data points gauge Compass Diversified Holdings or any dividend-paying firm. The key three are:

(1) Price

(2) Dividends

(3) Returns.

Those three basic keys best tell whether any company has made, is making, and will make money.


CODI Price

Over the past year, Compass's share price rose 18.6% from $18.63 to $23.56 as of Friday’s market close.

If Compass shares trade in the range of $17.00 to $30.00 this next year, its recent $23.56 share price might rise to $27.00 by next year. Of course, Compass’s price could drop about the same $3.44 estimated amount, or more.

My annual upside estimate of $3.44, however, is calculated at as $2.00 below the median of one-year target estimates from six analysts covering compass for brokers.

CODI Dividend

Compass Diversified Holdings has paid variable quarterly dividends since October, 2010. Compass’s recent Q dividend of $0.25 was declared January 4, to shareholders of record January 17th and payout was made January 25th.

The forward looking $1.00 annual dividend yields 4.24% at Friday’s $23.56 share price.

CODI Returns

To put it all together, add Compass’s stated annual dividend of $1.00 to the estimated price upside of $3.44 to find a $4.44 gross gain.

At Friday’s $23.56 share price, a little under $1000 would buy 42 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, would cost us about $0.24 per share.

Subtracting that likely $0.24 brokerage cost from the $4.44 gross gain produces a net gain of $4.20 X 42 shares = $176.40 for a 17.6% estimated net gain on the year.

You might choose to pounce on Compass Diversified Holdings It is an 18 year old dividend paying Connecticut Conglomerate.  Furthermore, the estimated $42.40 annual dividend income from $1k invested is about 1.8 times greater than Compass’s recent $23.56 single share price.

The exact track of Compass’s ongoing future price and dividend will be determined by market action.

Remember, the true value of any stock is best realized through personal ownership of shares.

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Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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