The performance of density functional theory (DFT) approximations for predicting materials thermodynamics is typically assessed by comparing calculated and experimentally determined enthalpies of formation from elemental phases, ΔHf. However, a compound competes thermodynamically with both other compounds and their constituent elemental forms, and thus, the enthalpies of the decomposition reactions to these competing phases, ΔHd, determine thermodynamic stability. We evaluated the phase diagrams for 56,791 compounds to classify decomposition reactions into three types: 1. those that produce elemental phases, 2. those that produce compounds, and 3. those that produce both. This analysis shows that the decomposition into elemental forms is rarely the competing reaction that determines compound stability and that approximately two-thirds of decomposition reactions involve no elemental phases. Using experimentally reported formation enthalpies for 1,012 solid compounds, we assess the accuracy of the generalized gradient approximation (GGA) (PBE) and meta-GGA (SCAN) density functionals for predicting compound stability. For 646 decomposition reactions that are not trivially the formation reaction, PBE [mean absolute difference between theory and experiment (MAD) = 70 meV/atom] and SCAN (MAD = 59 meV/atom) perform similarly, and commonly employed correction schemes using fitted elemental reference energies make only a negligible improvement (~2 meV/atom). Furthermore, for 231 reactions involving only compounds (Type 2), the agreement between SCAN, PBE, and experiment is within ~35 meV/atom and is thus comparable to the magnitude of experimental uncertainty.