Critical Comparison: NU (NYSE:NU) and CompoSecure (NASDAQ:CMPO)

CompoSecure (NASDAQ:CMPO) and NU (NYSE:NU) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Insider & Institutional Ownership

37.6% of CompoSecure shares are owned by institutional investors. Comparatively, 84.0% of NU shares are owned by institutional investors. 75.0% of CompoSecure shares are owned by insiders. Comparatively, 1.2% of NU shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

CompoSecure has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, NU has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-5.63%	-14.87%	36.45%
NU	17.12%	30.99%	4.82%

Analyst Ratings

This is a summary of current ratings and recommmendations for CompoSecure and NU, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	1	7	0	2.88
NU	1	4	5	0	2.40

CompoSecure presently has a consensus price target of $16.19, indicating a potential upside of 47.97%. NU has a consensus price target of $15.47, indicating a potential upside of 49.65%. Given NU’s higher possible upside, analysts clearly believe NU is more favorable than CompoSecure.

Earnings & Valuation

This table compares CompoSecure and NU”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$420.57 million	2.66	$19.24 million	($1.14)	-9.60
NU	$8.27 billion	5.96	$1.03 billion	$0.40	25.84

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

Summary

NU beats CompoSecure on 10 of the 14 factors compared between the two stocks.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, 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 Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.