NU (NYSE:NU) & CompoSecure (NASDAQ:CMPO) Critical Review

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

Analyst Ratings

This is a summary of current ratings and price targets for NU and CompoSecure, as provided by MarketBeat.

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

NU presently has a consensus target price of $15.47, suggesting a potential upside of 41.66%. CompoSecure has a consensus target price of $16.19, suggesting a potential upside of 47.56%. Given CompoSecure’s stronger consensus rating and higher possible upside, analysts plainly believe CompoSecure is more favorable than NU.

Institutional & Insider Ownership

84.0% of NU shares are held by institutional investors. Comparatively, 37.6% of CompoSecure shares are held by institutional investors. 1.2% of NU shares are held by company insiders. Comparatively, 75.0% of CompoSecure shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NU	$8.27 billion	6.29	$1.03 billion	$0.40	27.30
CompoSecure	$420.57 million	2.67	$19.24 million	($1.14)	-9.62

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.

Volatility and Risk

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

Summary

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

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.

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.