CIX

We rate COMPX INTERNATIONAL INC (CIX) as a Reduce with a composite score of 44.9/100 at a current price of $23.93. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in value (60th percentile) and stability (55th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (31th percentile) and investment (35th percentile) tempers our overall conviction. We assign a Narrow Moat rating (43/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

COMPX INTERNATIONAL INC holds a top-quartile position (#0 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.9/100 places it at rank #2808 in our full 7,333-stock universe. At $288M in market capitalization, COMPX INTERNATIONAL INC is a small-cap player in the Construction space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 11%, though momentum at the 31th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 29% (+5.7pp vs sector) narrow to operating margins of 13% (+5.7pp vs sector) and net margins of 11.8%, yielding a gross-to-net conversion rate of 40%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $23.93, COMPX INTERNATIONAL INC is trading near fair value based on current fundamentals. Our value factor score of 60/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 15.8x (roughly in line with the sector median of 19.1x), EV/EBITDA of 14.3x (at a premium), P/B of 2.1x, P/S of 1.9x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to COMPX INTERNATIONAL INC. The company exhibits strong financial stability with a beta of 0.75, conservative leverage (12% D/E), and a stability factor in the 55th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 55th percentile with quality at the 51th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: conservative leverage (12% D/E) limits balance sheet risk; a 9.40% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate COMPX INTERNATIONAL INC's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by disciplined leverage (12% D/E), a 9.40% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — COMPX INTERNATIONAL INC approaches this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 9.40% dividend yield, and the combination of 11.9% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, COMPX INTERNATIONAL INC receives a Reduce rating with a composite score of 44.9/100 (rank #2808 of 7,333). Our quantitative framework assigns a Narrow Moat (43/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 47/100.

Our analysis does not support a constructive view on COMPX INTERNATIONAL INC at this time. The combination of the current quantitative profile, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.