What is the best method to compare 3 companies? Would doing a modified version of a case study for each company work?
Background: I was asked to compare three companies and determine which would be the best to take on a long position. They asked for a deep dive and also understand I have limited experience conducting financial research.
These are similar companies, same industry?
If so, I think you start both your own research / a presentation with industry-level analysis. Brief history/background, industry structure (who are the major players, are there barriers to entry or not, who are the key suppliers, who are the customers), what do margins look like, what is industry wide growth, key trends, etc. Brief but hitting the key points.
Then I think a financial comparison of the three companies, an analysis of each one that includes both the financials / a qualitative analysis, and finally a recommendation.
For the financial comparison, I think it's important to have somewhere in your presentation / pitch a page that shows the key metrics side-by-side. Size, margins, capital structure, market valuation, growth rates. If these are all in the same industry, throwing in other comps would be a good idea.
Then you have a more specific analysis of each company / an investment thesis for one of them, and include some more qualitative stuff in this section. What is each company's niche within the industry, who is management - are they owner/operators who have a large stake in the company, are they experienced, have they shown themselves to be good capital allocators, etc.
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